Vanaspathi sparks 'oil crisis'
COCONUT INDUSTRY: The Coconut Growers' Association (CGA) urges
the government not to allow flooding of the local market with Vanaspathi
oil, for the purpose of protecting the coconut industry in the short to
medium term, industry sources said.
With the signing of the Indo-Lanka Free Trade Agreement (FTA) many
Indian companies came to Sri Lanka and invested in Vanaspathi palm oil
factories, which is a by product for the bakery industry.
However, due to manifold reasons India took a policy decision to stop
buying Vanaspathi oil from Sri Lanka. Therefore Vanaspathi oil
manufacturers are now eyeing the local market and sought Cabinet
approval to do so, CGA-President Nimal Samarakkody told the Daily News.
Apparently, the Ministry of Industries is not in favour of the move.
He said that under the Indo-Lanka FTA all items have to be traded in
a form of value addition up to at least 35 per cent and above. The raw
material for Vanaspathi is Palm oil, which is imported from Malaysia.
This industry would eat into the entire coconut industry especially
the coconut oil industry, the association says and requests the
Government not to allow flooding of the local market.
Samarakkody also said the coconut industry, was in a crisis situation
due to over dependence on the desiccated coconut industry, which needs
to be diversified into other coconut industry related sectors like in
Further, removal of VAT on copra needs to be expedited to jumpstart
the coconut oil industry which is going through a lull due to Vanaspathi