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Sri Lanka desiccated coconut exporters say facing closure with duty hike

Dec 18, 2008 (LBO) - Sri Lankan exporters of desiccated coconut said a recent government hike in edible oil import duty could put them out of business as prices of raw nuts will remain high, making their exports uncompetitive.

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The government raised import duty on edible oil by changing it from a 28 percent rate to a specific levy of 40 rupees a kilo earlier this month, which would amount to an effective duty of 61.5 percent with imported oil at 65,000 rupees a metric tonne.

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The government said the increase in import duty on edible oil would protect domestic oil mills hit by cheaper palm oil imports and ensure growers get better prices for raw nuts.

The move came after the price of imported edible oil fell to 65,000 rupees a tonne in November from 100,000 rupees in January 2008.

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However, exporters of coconut products such as DC millers said high prices for raw nuts would mean they would become uncompetitive against exports from other coconut growing countries.

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"Next year our mills will come to a grinding halt," said DC Millers Association president Felix Fernandopulle.



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