International experts advocate sustainable economic growth for Sri Lanka through edible oil
Daily FT: There is a substantial drain on the country’s finances as millions of rupees are splurged on palm oil imports in Sri Lanka, experts recently pointed out at an international conference.
90% of food processing companies using palm oil and more than 60% of edible products in supermarkets being made from palm oil shows a high demand for palm oil, a major reason Sri Lanka should critically reflect on lifting the ban on palm oil, they added.
The workshop “Sustainable Futures” on the advantages of using vegetable oils was held at Cosmic by Citrus, Lotus Tower in Colombo 10, organised by the Nucleus Foundation. The Agriculture Ministry and Plantation Industries served as the main partners for the event, with support from the Malaysian High Commission, the Indonesian Embassy, and Solidaridad, an international civil society organisation.
Solidaridad Asia Managing Director Dr. Shatadru Chattopadhayay said that, given Sri Lanka’s achievements in tea, there is potential for similar success with palm oil. “Replacing palm oil with any other vegetable oil would require more land. Palm oil produces two kinds of oil: palm oil and palm kernel oil, which enhances the sustainability discourse. Additionally, palm oil cultivation creates employment and promotes industrialisation. It is essential to look beyond import substitution and consider the trade deficit.”
The neighbouring markets, including Pakistan and Bangladesh, present significant trade opportunities. Indonesia, Malaysia, and Thailand are major players in palm oil production, accounting for over 90% of global production. This industry not only provides livelihoods for millions of smallholder farmers but also creates employment prospects for millions of workers across the supply chain.
Asian Palm Oil Alliance Chairman Atul Chaturvedi said that there is a common misconception about palm oil, but in the context of the APOA (Asia Pacific Palm Oil Alliance), there is clarity regarding its benefits and issues. “The APOA is actively working to dispel myths related to palm oil. The conference in Sri Lanka, held in a remarkable venue, has brought together a diverse group of scientists and industry experts. The attendance of numerous delegates highlights the critical importance of edible oil. Both India and Sri Lanka have similar per capita consumption rates of edible oil, and with rising income levels, this consumption is expected to increase. As Sri Lanka’s economy grows, its reliance on imports will continue if the ban on oil palm cultivation persists.”
“India imports 16 million tons of edible oil annually, valued at $ 18-19 billion. Sri Lanka should take heed of the mistakes made by India, as dependence on imports will continue to grow. Both countries need to address their edible oil security issues.”
OSL take:
Sri Lanka is in the process of increasing revenue generation for the country, especially through the exports sector. While the country’s exports sector is already a key revenue generator to Sri Lanka, the local authorities are looking at further increasing the revenue generated through the sector. With Sri Lanka further strengthening its trade ties and trade concessions with other countries while diversifying and expanding the country’s export product portfolio, Sri Lanka’s exports sector is on a growth path ensuring increased revenue to the country. It is in such a backdrop that Sri Lanka is looking at promoting the export of edible oil to overseas markets. Given that Sri Lanka is looking at expanding its export product portfolio while also looking out for new foreign markets, the growing business/investment opportunities could be explored by foreign businesses/investors. Foreign businesses could look at forming collaborations with local businesses while also looking at setting up bases in Sri Lanka to engage in trading activities with other countries using the preferential trade ties enjoyed by Sri Lanka with other countries.