International experts advocate sustainable economic growth for Sri Lanka through edible oil

There is a substantial drain on the country’s finances as millions of rupees are splurged on palm oil imports in Sri Lanka, experts recently pointed out at an international conference.

90% of food processing companies using palm oil and more than 60% of edible products in supermarkets being made from palm oil shows a high demand for palm oil, a major reason Sri Lanka should critically reflect on lifting the ban on palm oil, they added.

The workshop “Sustainable Futures” on the advantages of using vegetable oils was held at Cosmic by Citrus, Lotus Tower in Colombo 10, organised by the Nucleus Foundation. The Agriculture Ministry and Plantation Industries served as the main partners for the event, with support from the Malaysian High Commission, the Indonesian Embassy, and Solidaridad, an international civil society organisation.

Solidaridad Asia Managing Director Dr. Shatadru Chattopadhayay said that, given Sri Lanka’s achievements in tea, there is potential for similar success with palm oil. “Replacing palm oil with any other vegetable oil would require more land. Palm oil produces two kinds of oil: palm oil and palm kernel oil, which enhances the sustainability discourse. Additionally, palm oil cultivation creates employment and promotes industrialisation. It is essential to look beyond import substitution and consider the trade deficit.”

The neighbouring markets, including Pakistan and Bangladesh, present significant trade opportunities. Indonesia, Malaysia, and Thailand are major players in palm oil production, accounting for over 90% of global production. This industry not only provides livelihoods for millions of smallholder farmers but also creates employment prospects for millions of workers across the supply chain.

Asian Palm Oil Alliance Chairman Atul Chaturvedi said that there is a common misconception about palm oil, but in the context of the APOA (Asia Pacific Palm Oil Alliance), there is clarity regarding its benefits and issues. “The APOA is actively working to dispel myths related to palm oil. The conference in Sri Lanka, held in a remarkable venue, has brought together a diverse group of scientists and industry experts. The attendance of numerous delegates highlights the critical importance of edible oil. Both India and Sri Lanka have similar per capita consumption rates of edible oil, and with rising income levels, this consumption is expected to increase. As Sri Lanka’s economy grows, its reliance on imports will continue if the ban on oil palm cultivation persists.”

“India imports 16 million tons of edible oil annually, valued at $ 18-19 billion. Sri Lanka should take heed of the mistakes made by India, as dependence on imports will continue to grow. Both countries need to address their edible oil security issues.” 

Chaturvedi said that in India, misinformation maligning palm oil is largely orchestrated by vested interests. “If palm oil was produced in the Western world, the situation might be different – palm oil would not be so vilified. The palm oil industry boosts food security in these countries since it backs a major segment of the edible oil consumed by their populations. Palm oil is broadly used in various food products due to its adaptability, affordability, and functionality.”

“India spends around $ 1.37 billion for the promotion of palm oil. India had planned to plant palm oil on 1 million hectares by the end of next year to reduce the palm oil import bill, which is over $ 2 billion annually,” Chaturvedi said. “As no concrete evidence was found that growing palm oil results in deforestation or Sri Lanka or the world over lifting the plan, oil cultivation is a very economically viable option.”

Solidaridad Asia Veg Oil Program Head Dr. Suresh Motwani said that, in 2017, the Solvent Extractor Association and Solidaridad, with the support of the Indian Institute of Oil Palm Research and many industry stakeholders, developed India’s standards for sustainable oil palm called IPOS. “Implementing IPOS addresses sustainability risks and related issues. Last month, we proposed a sustainable palm oil framework such as the IPOS for Sri Lanka, SRI POS, to be developed by the Agriculture Ministry.” 

The dominance of palm oil in Asian vegetable oil production highlights the significant role it plays in the region’s economy. The production of palm oil creates employment opportunities and contributes to economic growth in both countries. 

He added that it also serves as a major export commodity, generating substantial revenue for the countries involved. “Palm oil production plays a crucial role in the Asian environment and economy.”

Solvent Extractors Association India Executive Director Dr. B.V. Mehta said that palm oil can emerge as a strategic commodity for Sri Lanka. “Sri Lankans use palm oil in almost every aspect of life: from toothpaste to shampoo to soap to lipstick to confectionery to bakery products – palm oil is an integral component. It is in 50% of all consumer products and plays a central role in a slew of industrial applications,” he said. 

“There is no realistic alternative for palm oil for most of the applications and countries. Over the last decade in Sri Lanka, edible oil consumption has been growing at a CAGR of 3%. At present, local consumption is around 264,000 MT, from which only about 20% is produced locally. Expanding in coconut from the present 40,000 MT to meet the shortfall is neither economically viable nor technically feasible. Presently, Sri Lankan oil palm cultivation covers approximately 12,000 ha, less than 1% of the total agricultural land in the country.”

Participants at the workshop deliberated on the economic benefits gained from the vegetable oil industry, which also had a ripple effect on other parts of society. Expanded incomes and improved economic circumstances allow individuals and families to have an enhanced quality of life and access to education, and improve their access to food and health systems.

Overall, the vegetable oil supply chain significantly influences sustainable development by buoying social and economic growth in producing countries.

The employment opportunities created by the palm oil industry stretch beyond farming and harvesting to include processing, logistics, and other ancillary services. This provides economic gains and strength to communities and adds to the total socio-economic development of these countries.

The palm oil industry in Asian countries plays a vital role in ensuring food security and supporting the livelihoods of millions of people.