Mar 23, 2008 (LBO) – Sri Lanka’s exporters of value added coconut products are asking to authorities to free edible oil imports, so that profits from oil milling would fall, freeing more nuts for other industries. Sri Lanka’s coconut milk powder, coconut cream and desiccated coconut producers have been found their cost of production increasing nut prices, but have been finding it difficult to compete in the international market.
Sri Lanka does not allow the import of raw coconut due to fear of disease making nuts a ‘non-tradable’ products whose prices cannot come down through import when the country prints money and drives up demand pressure or there are supply shortfalls.
Coconut oil imports are also restricted with heavy import duties, again preventing the island from benefiting from the ‘deflationary’ impact of ‘tradable’ imports.
In Sri Lanka a coconut is now retailed from around 38 to 42 rupees. Coconut product exporters say this is the highest price paid by a consumer in any producing country.
“This is because there is a very high tariff on imported edible oil amounting to 60 to 65 percent causing an artificially high market for coconut oil there by resulting