SRI LANKA SAYS PURCHASE OF BURMESE RICE WILL GO THROUGH;

UNCLAS COLOMBO 000453 SENSITIVE SIPDIS STATE FOR SCA/INS, EAP/MLS, AND EEB/TPP/ABT/ATP JANET SPECK AG FOR FAS CHRIS RIKER NEW DEHLI PASS TO FAS E.O 12958: N/A TAGS: ECON EAGR EAID BM CE SUBJECT: SRI LANKA SAYS PURCHASE OF BURMESE RICE WILL GO THROUGH; PROVIDES $25,000 CYCLONE RELIEF REF: A. RANGOON 320 B. COLOMBO 428 ¶1. (SBU) Summary: Sri Lanka's Secretary of Trade and Commerce assured the public that he expected a purchase of 22,000 metric tons of rice from Burma to go ahead, despite the impact of Cyclone Nargis. The purchase was part of Sri Lanka's effort to fill a domestic shortage of about 300,000 metric tons of rice. The secretary, in making the assurance about the Burmese rice, probably wanted to avert further public concern about domestic rice shortages and rising prices. However, in light of the cyclone's devastation, it looks likely that Sri Lanka will only receive the fraction of the rice purchase that had already sailed before the cyclone hit. Separately, Sri Lanka announced Wednesday that it would donate $25,000 to Burma for cyclone relief efforts. End summary. ¶2. (U) Secretary of Trade and Commerce R.M.K. Ratnayake told the local media May 8 that Cyclone Nargis had delayed, but not cancelled, delivery of 22,000 metric tons of rice that Sri Lanka had purchased from Burma. He stated that two of three bulk cargo ships set to deliver the rice had already been loaded and were awaiting a safety clearance from the Rangoon Harbor Master. ¶3. (SBU) In light of ref A report that Nargis had totally destroyed the Rangoon port, Econoff asked Burmese Ambassador to Sri Lanka Tin Oo Lwin at a social occasion whether the minister's assurance was realistic. The Ambassador replied that in fact a portion of the rice had left Burma for Sri Lanka prior to the cyclone. He was unsure of the size of the shipment. He did not speculate on whether the remainder would ever follow, as he said that he had no information on its status and indeed little firm information of any kind about the situation in Burma. ¶4. (SBU) Separately, Sri Lanka gave Burma $25,000 as cyclone relief. Sri Lankan Foreign Secretary Palitha Kohona gave Ambassador Lwin a check along with an expression of Sri Lanka's condolences in Colombo May 8, according to media reports. ¶5. (SBU) Comment: Sri Lanka is trying to avert worries about further domestic increases in rice prices, which have doubled in the past year (ref B). It needs to import about 300,000 metric tons to make up for a domestic production shortage exacerbated by heavy rains. It is unclear whether the Trade Secretary's or the Burmese ambassador's information about the status of the rice shipment is more accurate. More concretely, Sri Lanka also announced this week that it had arranged to buy 50,000 metric tons of rice from Thailand. BLAKE