Palm Oil Industry In Sri Lanka: An Economic Analysis

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dc.contributor.authorPathiraja, Erandathie; Samaraweera, Ruwan; Fernando, Hiruni; Bogodage, Jaann
dc.date.accessioned2024-07-24T07:11:23Z
dc.date.available2024-07-24T07:11:23Z
dc.date.issued2023
dc.description.abstractPalm oil is the main edible oil source consumed in the world. Sri Lanka began importing palm oil a few decades back mainly due to the increasing local demand driven by population and income growth, changes in food habits and developments in food and related industries. Considering the rising demand for imported palm oil and the potential suitability of climatic and soil factors in the country, oil palm was allowed to be cultivated on 20,000 hectares (ha) as part of a strategy to promote import substitution. Hence, regional plantation companies (RPCs) were permitted to cultivate oil palm in marginal rubber lands in selected districts. However, oil palm cultivation and consumption are globally criticised for its environmental and health impacts regardless of rewarding factors such as low cost and versatility in food and many other industries. Sri Lanka also paid attention to possible environmental hazards and health impacts of consuming palm oil as well as resistance from local environmental activists. As a result, oil palm cultivation was banned and a phase out within 10 years was proposed as a policy decision. Subsequently, the country took measures to restrict the importation of palm oil, considering its health hazards. Yet, alternatives to satisfy the local demand are limited. Hence, the decision was revised to keep the market open under licences. However, the industry investors claim that the criticism is unreasonable. Therefore, this study explores the economic aspects of the industry, such as costs and returns, contribution to the economy, tariff protection, market linkages etc., including potential environmental and social issues in the palm oil industry value chain in Sri Lanka.
dc.identifier.urihttp://172.16.30.46/handle/789/4710
dc.language.isoen
dc.publisherInstitute Of Policy Studies of Sri Lanka
dc.relation.ispartofseriesIndustrialisation research series; No. 12
dc.titlePalm Oil Industry In Sri Lanka: An Economic Analysis
dc.typeWorking Paper
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