The haphazard policy decisions of the government is pushing the coconut industry into a major crisis and to overcome this situation the Coconut Growers Association (CGA) is stepping in with a concerted effort to minimise the problems they face. The struggle is for a reasonable farm-gate price per nut that would give the grower a [...]

Business Times

Coconut industry rises against increasing imports of palm oil


The haphazard policy decisions of the government is pushing the coconut industry into a major crisis and to overcome this situation the Coconut Growers Association (CGA) is stepping in with a concerted effort to minimise the problems they face.

Mr. Ranjith Dias

The struggle is for a reasonable farm-gate price per nut that would give the grower a reasonable margin over and above the cost of production. Also by allowing unlimited import of palm oil and palm olein, the Government has destroyed the copra industry and coconut oil industry resulting in closure at almost all coconut mills.

Growers say that if regular fresh coconut exports are allowed and if firm restrictions are imposed on the import of palm oil, while these actions benefit the industry to a great extent, they could ensure a reasonable farm-gate price per nut.

While the CGA as a whole works meticulously to create an atmosphere to develop the coconut industry in the country, there are also several industry experts who do research like Ranjith Dias who was a past president of CGA for three years, past secretary for three years and past treasurer for three years, the present President, Jayantha B. Samarakoon and Chrishantha Jayawardena, Committee member CGA.

Improved weather conditions of monsoonal rain commencing from 2017 through to 2018 contributed to enhanced coconut yields throughout the country.

The cultivation that has been extended to the North and East also saw success and yielded good crops. It is predicted that the coconut crop would increase to 562 million nuts during the period January to June 2019, which is a 44 per cent increase over the same period in 2018 and that the actual crop production from January to June 2019 would reach 1,840 million nuts.

With good agricultural practices the cost of production per nut should be around Rs. 35 on the basis of 60 trees per acre bearing 60 nuts per tree. But Mr. Dias told the Business Times that a husked coconut farm-gate price is averaging to Rs. 29 to 32 and when the crops are harvested by April May farm-gate prices would drop to even below Rs 25 resulting in farmers being unable to manage their properties. This would result in the selling price going below the COP.

He said that this is the biggest fear they have now. To safeguard the farmer, he said that the government should maintain a consistent policy covering all aspects.

Mr. Jayawardena said that in the years 2016 and 2017 with low coconut production the price of a coconut increased to between Rs. 100 and 120 resulting in the use of coconut milk and powder packets and reduced consumption of fresh coconut.

He pointed out that the import of palm oil and palm olein in 2000 had grave repercussions as it forced the closure of a large number of coconut mills that produced fresh coconut oil serving the local consumer. The domestic edible oil requirement was met with 50 per cent locally manufactured coconut oil and the other 50 per cent by imported palm oil and palm olein oil.

By 2010 the domestic edible requirement of 84,000 metric tons (mt) was met by 34,000 MT  from 40 per cent local coconut oil and 50,000 mt or 60 per cent imported palm oil and palm olein oil. The stark facts by Mr. Jayawardena show that by 2018 only 12 per cent of the domestic requirement of edible oil came from locally manufactured coconut oil and the balance 80 per cent was met by the imported palm and palm olein oil.

iThis sheer negligent attitude of the government by not controlling the import of palm and palm olein has almost completely destroyed the copra and coconut oil industry in Sri Lanka. Mr. Jayawardena points out that the edible oil consumer should be protected adequately by SLS standards as coconut oil is now freely blended with palm and palm olein and the percentage of such blending has not been disclosed.

In the case of palm oil imports earlier the Customs withheld in the port 24 containers indicating that they should be examined to see whether they are genuine palm oil and against this withholding the importer instituted a case in the Appeal Court to get them released, but the Court allowed the withholding until they are examined. In this case the CGA intervened as an affected party. The importers have given another name for the contents of the containers as ‘Crude Palm Fatty Acid’.

The importer appealed against the Appeal Court Order to the Supreme Court while in the meantime the Customs Officer involved in the inquiry agreed to release the said 24 containers. The CGA instituted another case against the decision to release the containers and a fresh inquiry is being held to decide the state of the contents of the containers and this case is scheduled to be taken up on March 19 in which the Customs has been ordered to submit the results of their inquiry to the Court.

Mr. Dias said that the government is in the habit of discontinuing export of fresh coconut when the production goes down resulting in losing the export market for fresh coconut. He said that when the crop rises, export restrictions are imposed resulting in exporters waiting for a couple of months to re-establish their export market.

In the meantime it is noted that the Minister of Plantation Industries has sought the approval of the Cabinet to release 20,000 hectares of land to cultivate oil palm trees, a request that has been turned down by the President.

He said that not only the direct import of palm oil but said that most of the edible oil marketed under the guise of vegetable oil is actually palm oil and identifying it as vegetable oil is misleading the consumer.

On the labels of some of these product packages while the name vegetable oil is indicated prominently, the words palm and palm olein is hidden and indicated in very small letters.

He said that even some popular margarine brands contain palm oil adding that according to some newspaper reports imported milk power will be sent to recognized laboratories to be tested for animal fat, palm oil and lactose. He said that while labels indicate vegetable oil, the products actually are made out of palm oil.

Mr. Jayawardena said that the export quantity of coconut oil, virgin coconut oil and desiccated coconut has declined from 2016 to 2018.

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