Sri Lanka is experiencing a substantial financial drain with millions being spent on palm oil imports, industry stakeholders said while calling for reevaluation on the ban on palm oil to address this issue.

During a workshop organized by the Nucleus Foundation on the advantages of using vegetable oil, industrialists highlighted the nation’s high demand for palm oil by pointing out the reliance of over 90 percent of food processing companies and 60 percent of edible products on the edible oil.

The event, held at Lotus Tower, Colombo, was held in partnership with the Ministry of Agriculture and Plantation Industries, along with the support of the Malaysian High Commission, the Indonesian Embassy, and Solidaridad.

“It is essential to look beyond import substitution and consider the trade deficit. In Sri Lanka, there is potential for success with palm oil cultivation as it creates employment and promotes industrialization for millions of smallholder farmers and workers across the supply chain,” Solidaridad Managing Director Dr. Shatadru Chattopadhayay said.

Indonesia, Malaysia, and Thailand are major players in palm oil production, accounting for over 90 percent of global production while Pakistan and Bangladesh present significant trade opportunities.

The Asian Palm Oil Alliance (APOA) stated that Sri Lanka should actively consider oil palm cultivation as an economically viable option, noting that no concrete evidence has shown that growing palm oil results in deforestation.

“Both India and Sri Lanka have similar per capita consumption rates of edible oil, and with rising income levels, this consumption will increase. As Sri Lanka’s economy grows, its reliance on imports will continue if the ban on oil palm cultivation persists.” APOA Chairman Atul Chaturvedi stressed.

Solidaridad Asia has proposed a sustainable palm oil framework for Sri Lanka, highlighting it as a major export commodity for the nation. The proposal is to be developed by the Ministry of Agriculture.

“The dominance of palm oil in Asian vegetable oil production highlights its significant role in the region’s economy and environment,”Solidaridad Head of the Asia Veg Oil Programme Dr. Suresh Motwani stated during the workshop.

Palm oil also has the potential to emerge as a strategic commodity for Sri Lanka, with 50 percent of all consumer products containing it, according to the Solvent Extractors Association of India.

“There is no realistic alternative for palm oil for most applications and countries. Over the last decade in Sri Lanka, edible oil consumption has been growing at a CAGR of 3 percent. Currently, local consumption is around 264,000 MT, of which only about 20perecnt is produced locally,” Executive Directo Dr. B.V. Mehta stated.

Overall, the event highlighted the significant influence of the vegetable oil supply chain in sustainable development. The palm oil industry was highlighted as a key player in ensuring food security and supporting livelihoods, especially in the Asian region.