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Sheron
Sheron
Mar 25 2026
60Prof. Buddhi Marambe urges embedding uncertainty into pricing as input costs surge
Fertiliser prices jump from $ 450 to $ 810 per tonne amid supply risks
Energy costs seen cascading across production and household consumption
Calls for prioritisation of key crops to balance food security and exports
University of Peradeniya Senior Prof. Buddhi Marambe called for a fundamental shift in how Sri Lanka calculates and manages agricultural costs, warning that existing frameworks are inadequate to deal with the uncertainty and volatility triggered by the Middle East war.
Speaking at a recent CMA Sri Lanka forum on the impact of the Middle East crisis on Sri Lanka, he said pricing and cost structures must be redesigned to reflect persistent external shocks. “Costing has to embed the uncertainties that are there,” he said, stressing that traditional approaches no longer capture the realities of fluctuating input prices, supply constraints and geopolitical risks.
He said the war has already driven sharp increases in key agricultural inputs. “Global fertiliser costs have increased from $ 450 per tonne to $ 810 within day, and keeps fluctuating,” he noted, highlighting the scale of fertiliser price escalation in global markets due to the Middle East conflict.
However, Prof. Marambe stressed that pricing is only part of the challenge, pointing to growing uncertainty around availability. “Even if it’s available, in a situation like this, it will be grabbed mostly by the wealthy nation,” he said, warning that supply access will increasingly depend on global competition rather than affordability alone.
He noted that Sri Lanka’s structural reliance on imports compounds the problem. “Agriculture alone cannot meet the food requirements of the country. Trade matters a lot,” he said, explaining that higher global prices are feeding through to domestic production costs, while disruptions to trade flows could limit access to essential inputs.
Energy costs were identified as a key variable that must be incorporated into revised costing models. “Fuel costs, availability of fuel will have a negative impact on agriculture,” he said, noting that increased mechanisation has deepened dependence on energy inputs.
He said the impact extends across the entire value chain. “The electricity cost will also increase the transportation cost, milling cost, storage cost, and more importantly the household cooking cost,” he said, underlining that agricultural costing must now account for downstream inflationary pressures affecting both producers and consumers.
Prof. Marambe also pointed to policy interventions to stabilise short-term supply, including efforts to distribute fertiliser at around Rs. 9,500 per tonne through structured channels. However, he cautioned that such measures cannot override global pricing dynamics. “Even if the supply comes in, the prices are to increase. That’s a natural phenomenon in this type of situation,” he said.
Given these constraints, he said prioritisation must be built into both policy and costing decisions. “Prioritisation is going to be a must,” he said, identifying curry for direct consumption, maize for animal feed, and tea as the key export crop as areas requiring targeted allocation of limited resources.
On tea, he warned that nutrient management is critical to sustaining output, linked to a reliable supply of fertiliser. He also noted efforts to secure fertiliser through Government-to-Government (G2G) arrangements, particularly with China, Sri Lanka’s main urea supplier, to support upcoming cultivation seasons, while cautioning that supply security does not eliminate cost pressures.
Prof. Marambe said the broader challenge is managing a convergence of risks. “Uncertainties are very high these days, be it climate, political, geopolitical. All of these in combination are creating this havoc,” he said, adding that policy responses must shift from short-term fixes to structured, forward-looking frameworks.
He stressed that revised costing systems must balance competing pressures across the economy. “We have to address both farmers and the consumers at the same time,” he said, calling for coordinated input from the Department of Agriculture, Agrarian Development Department and research institutions to design mechanisms that sustain production while containing food inflation.
Prof. Marambe warned that while food inflation had eased in recent periods, the current trajectory points to renewed pressure, making it critical that pricing, supply management and policy interventions are aligned to prevent further instability in the food system.
source: FT
