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Palm oil import ban: ‘Bakeries, confectionaries will shut down’

07 Apr 2021

  • Industry claims crisis ahead of festive season

  • Confectionery manufacturers want import license

BY Dinitha Rathnayake and Hiranyada Dewasiri   The ban on palm oil import, ordered by President Gotabaya Rajapaksa, would lead to the closure of all bakeries and companies that make confectionaries, bakery owners and confectionery manufacturers claimed. Speaking to The Morning, All Ceylon Bakery Owners Association (ACBOA) President N.K. Jayawardena said: “In Sri Lanka, the daily consumption of palm oil is 550 metric tonnes (MTs). This is all going into bakery products and biscuits.” Some make bakery products from margarine while others make only from palm oil, Jayawardena noted, claiming that palm oil, however, is the main ingredient utilised in making margarine in Sri Lanka. “We don’t have enough coconut oil even for consumption, so how can we have margarine made out of coconut oil? We don’t oppose President Rajapaksa’s decision, but the Government should think about an alternative solution before banning palm oil. The entire bakery industry depends on margarine made out of palm oil, or on palm oil. How can we survive without that?” Jayawardena earlier said that the Association was looking for tax relief as the present government tax for one litre of palm oil is Rs. 250. It is looking for a reduction of Rs. 100. “Last July, one MT of palm oil cost around $ 450 while the current cost for one MT of palm oil is around $ 1,050. It’s a 150% increase.” Speaking to The Morning yesterday (6), Lanka Confectionery Manufacturers Association (LCMA) Chairman S.M.D. Suriyakumara said that the confectionary industry would shut down with the palm oil import ban and requested the Government to therefore issue them a license to import the palm oil required to continue the production of confectionaries. “The ban on importing palm oil will shut down the whole confectionary industry in three to four days, as we only have stocks to last another three days. We will not be able to meet the supply for the Sinhala and Tamil New Year season. We request the authorities to give the confectionary industry a license to import palm oil stocks that are required for our production process.” The whole industry would need about 2,500 MTs per month, he said, adding that an import ban on palm oil would also affect the export of confectionaries. Suriyakumara said that the industry is in agreement with the health concerns raised and said that they only use oil that meets the standards of the Sri Lanka Standards Institute (SLSI). “We are exporting these products, so it is essential for us that our products meet these standards. Therefore, we follow and abide by all health standards and we use no products of inferior quality.” The confectionary industry has been trying to develop coconut oil as a substitute for the last nine months together with the Coconut Development Board and the Coconut Research Institute, Suriyakumara said. However, he said that more research needs to be done to use coconut oil as a complete substitute. “We have been trying to manufacture confectionaries with coconut oil but this cannot be done 100% since products like chocolates cannot be manufactured with coconut oil at the moment.” He also said that the short supply of coconut oil and the high prices are challenges that they face at the moment. President Rajapaksa instructed to completely ban the importation of palm oil with immediate effect on 5 April. The Controller General of the Department of Imports and Exports Control has been advised to issue the relevant gazette order to give effect to this instruction, by the Secretary to the President Dr. P.B. Jayasundara on 5 April itself. Additionally, the Director General of Customs has been informed of this decision and advised to refrain from clearing palm oil cargo. At the same time, the cultivation of oil palm (katu pol) will be completely banned. Orders have been issued under the relevant laws to enforce the advice given by the President to ban the cultivation of oil palm completely. About six months ago, the President had instructed to gradually ban the cultivation of oil palm in the country. Furthermore, those companies and entities which have done such cultivations shall be required to remove them in a phased out manner, uprooting 10% at a time and replacing it with rubber cultivations or environmentally friendly crops each year. When this is fully operational, the Government intends to stop the cultivation of oil palm and the consumption of palm oil completely. Palm oil has a bad reputation because it is high in saturated fat, which has long been linked to heart disease.


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