Palm oil import causes significant foreign currency outflows from Sri Lanka
By: Staff Writer
July 26, Colombo (LNW): A significant financial impact has been exerted on Sri Lanka economy by Palm oil imports in to the country, recent discussions at an international conference in Colombo highlighted.
There is a substantial drain on the country’s finances as millions of rupees are binged on palm oil imports in Sri Lanka, experts recently pointed out at an international conference.
Experts revealed that the country’s high dependency on palm oil—used in 90% of food processing and found in over 60% of supermarket products—necessitates a reevaluation of the current ban on palm oil.
The “Sustainable Futures” workshop, hosted by the Nucleus Foundation at Cosmic by Citrus, Lotus Tower, was attended by key figures from the Agriculture Ministry, Plantation Industries, and international partners including the Malaysian High Commission,
Indonesian Embassy, and Solidaridad. The event emphasized the potential economic and environmental benefits of palm oil, drawing parallels to Sri Lanka’s successful tea industry.
Dr. Shatadru Chattopadhayay from Solidaridad Asia argued that palm oil could offer similar benefits. Unlike other vegetable oils, palm oil yields both palm oil and palm kernel oil, making it a more land-efficient option. Palm oil cultivation also creates jobs and supports industrialization, which is crucial for addressing Sri Lanka’s trade deficit.
Chattopadhayay pointed out that neighboring countries like Pakistan and Bangladesh present trade opportunities for palm oil, highlighting the global dominance of palm oil producers like Indonesia, Malaysia, and Thailand, which together account for over 90% of global production.
Asian Palm Oil Alliance Chairman Atul Chaturvedi addressed common misconceptions about palm oil. He noted that despite misinformation, palm oil is a critical component of the edible oil market due to its versatility and affordability.
As Sri Lanka’s economy grows, its reliance on palm oil imports will persist unless the ban on oil palm cultivation is reconsidered. He compared Sri Lanka’s situation to India’s, where reliance on imported edible oil is substantial. India spends approximately $1.37 billion annually on promoting palm oil and plans to expand local cultivation to reduce its import bill.
Dr. Suresh Motwani from Solidaridad Asia emphasized the development of sustainable palm oil standards, such as IPOS in India and the proposed SRI POS for Sri Lanka. Implementing such frameworks can help address sustainability concerns.
Dr. B.V. Mehta from the Solvent Extractors Association India highlighted palm oil’s widespread use in consumer products and its critical role in Sri Lanka’s economy. He noted that local palm oil cultivation covers only about 12,000 hectares, a small fraction of the agricultural land, and that expanding coconut oil production is neither feasible nor sufficient to meet the demand.
Overall, the workshop underscored the economic and social benefits of palm oil, including job creation and contributions to sustainable development. The palm oil industry supports food security and economic growth in producing countries, reflecting its vital role in the Asian economy.
