Sri Lanka bans palm oil imports with immediate effect; asks plantations to uproot trees

COLOMBO: Sri Lankan President Gotabaya Rajapaksa has banned the import of palm oil with immediate effect and ordered local plantation companies to uproot 10 per cent of their trees and replace them with rubber trees or other environment-friendly crops, a move that could benefit the domestic coconut oil industry.

The cultivation of palm (katupol) oil, at the same time, will be completely banned, the Presidential Secretariat said in a statement on Monday.

The Director-General of Customs has also been informed of this decision and advised to refrain from clearing palm oil cargos at the Department of Customs, it said.

The Controller General of the Department of Imports and Exports Control has been advised to issue the relevant gazette order to give effect to the order.

About six months ago, the President had instructed to gradually ban the cultivation of palm oil in the country, the Presidential Secretariat said.

Companies and entities, which have done such cultivations, will be required to remove them on a phased-out manner with 10 per cent uprooting at a time and replacing it with the cultivation of rubber or environment-friendly crops each year “to free Sri Lanka from oil palm plantation and palm oil consumption”, it said.

When this is fully operational, the government intends to stop the cultivation of oil palm and the consumption of palm oil completely, the order added.

Sri Lanka imports nearly 200,000 tonnes of palm oil from Malaysia and Indonesia yearly, according to media reports.

In a reaction, the Consumer Protection Society welcomed the move.

Ranjith Withanage of the Society said the decision would boost the local coconut oil industry.

“More people would be inclined to enter the coconut oil industry as a result,” he said.

According to the Sri Lanka Export Development Board, the country is the fourth-largest exporter of coconut products to the world.

Coconut accounts for approximately 12 per cent of all agricultural produce in Sri Lanka with the total land area under cultivation covering 409,244 hectares (in 2017) and about 2,500-3000 million nuts produced per year (by 2017).

New measures have been introduced to enhance the annual coconut crop to 3,600 million nuts per year.

Reacting to Sri Lanka's decision to ban the import of palm oil, Malaysia said the move is not expected to affect the country's key commodity industry as the country's market is growing in several countries such as Africa and the Middle East.

Minister of Plantation Industries and Commodities Dr Mohd Khairuddin Aman Razali said apart from that, the demand for Malaysia's palm oil was also increasing in the Philippines and Vietnam, thus proving that the quality of the commodity was one of the factors that helped expand its market globally.

"The world has a population of over seven billion people and we are confident our palm oil will be accepted worldwide.

"If one party is not interested, many more are interested and most importantly we give the best quality in the country's palm oil production," he was quoted as saying by Malaysia's The Star newspaper reported on Tuesday.

Mohd Khairuddin said the restrictions imposed by Sri Lanka was a discrimination against the country's product.

"Sri Lanka needs to get complete information from the Malaysian government on the efforts made so that our right to market palm oil abroad is not disputed," he said.