Sri Lanka hikes tax on edible oil imports

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

April 10, 2009 (LBO) – The Sri Lankan government has raised the import cess on palm oil to 60 rupees per kilo from 40 rupees, Coconut Cultivation Board officials said. The move is aimed at ensuring a better price for coconut growers, mostly small farmers, and to reduce imports of edible oils, mainly palm oil, they said.

The decision came after prices of raw nuts fell to levels that were unremunerative for coconut growers.

But coconut export industry officials said the import tax hike would also mean consumers would have to pay higher prices for locally made coconut oil.

Furthermore, desiccated coconut (DC) millers would have to pay higher prices for raw nuts, industry officials said.

This would make exporters of desiccated coconut less competitive in international markets against DC from other origins that were cheaper.

Industry officials said the problems arose because the island’s coconut crop was not enough to meet the requirements of both domestic consumers as well as industries like oil mills and DC mills.

The government uses import duty changes to encourage imports of edible oil when the crop drops, such as after a drought, and then

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