Restriction makes gee exporters face sour

Irangika RANGE

IMPORT: Vanaspathi industry has come to a standstill as a result of the sudden import restriction taken by the Indian government to control the Vanaspathi gee (hydrogenated palm oil) imports from June 2.

There are ten hydrogenated palm oil manufacturers in Sri Lanka and they have received a quota for 25,000 tons under the Free Trade Agreement (FTA) between India and Sri Lanka.

The country earns US$ 2 billion from the Vanaspathi exports annually. The Vanaspathi Industry contributes 43 per cent at the FTA and it is a major exporter to India under the Agreement.

Official of the Vanaspathi Manufacturers Association of Sri Lanka said with the sudden decision, the all ten exporters have stopped their production immediately till the Indian government take an action to relax the restriction.

He said this has resulted in a loss of confidence among the investors and also the loss of employment amounts to almost 5,000 people who are directly involved in the industry.

Around 10,000 people too are indirectly affected including sectors such as shipping, forwarding, packaging, port service and printing. He said that around 40 containers released per day to India and over hundred containers are stuck in Indian port.

He said that palm oil is a vegetable oil and it is the best substitute for animal oil. It has a big demand in the Indian market. The total edible oil market consumption is 5 million metric tones in India and out of that 1.5 million metric tones of palm oil are consumed.

There is a palm oil market requirement of bakers which is around 300 metric tones.

Ten companies are set up under the FTA, which was signed in 1998. These 10 units are in trouble with the restriction of quota under the FTA.

The association expects to hold serious discussions with the Government to solve the problems to ensure the investors that the trade between the two countries is liberal, build confidence and transparency.