Business

Plantation companies to lose Rs 500 mn. due to govt. vacillation on oil palm

Published

6 years ago

2020/08/23

Plantation companies will sustain a cumulative loss of more than Rs 500 million within months due to policy inconsistencies and vacillation by the government on a well-regulated expansion of Sri Lanka’s oil palm cultivation, the sector’s apex industry association has warned.

The Palm Oil Industry Association (POIA) said 356,000 oil palm plants imported on the strength of a government decision to expand cultivation have been maturing in nurseries for more than three years, due to the government’s failure to address concerns arising from falsehoods and disinformation spread by misled activists and lobbyists with vested interests.

“About 40 per cent of these trees may already be unviable and we fear that the entire stock may have to be destroyed within the next two months, unless the government resolves this matter expeditiously,” POIA President Dr Rohan Fernando said.

The Palm Oil Industry Association represents cultivators as well as refiners, processors, manufacturers, marketers and sellers of palm oil and other products of the oil palm, who have cumulatively invested Rs 26 billion in the industry.

Sri Lanka has less than 11,000 hectares under oil palm – just over one per cent of the extents under tea, rubber and coconut – and plantation companies had been mandated to increase the total area under oil palm to 20,000 hectares under strictly-enforced guidelines that ensure the industry is environmentally non-invasive, before the government back-pedalled on the plan.

Fernando said the industry’s appeal to the government for permission to plant whatever viable trees are left in the nurseries, would enable the plantation companies to reduce the losses they are faced with and help increase local production of palm oil at a time when imports are being restricted to conserve foreign exchange. He said even if the entire stock of trees had been planted, the country’s extent under oil palm would only have increased by about 2,750 hectares.

“We are also aware that the government is looking at expanding coconut cultivation to which we have absolutely no objection, but experts have calculated that it would take at least 20 years to reach a point where the country’s edible oil requirements can be met by locally-grown coconut,” Fernando said. “There is also concern that coconut oil production is more costly and requires more land than oil palm.”

He pointed out that baseless vilification of the local palm oil industry had resulted in the country producing just 23,000 tonnes of palm oil per annum and the import of a staggering 220,000 tonnes of crude palm oil into the country each year, at a cost of approximately Rs 22 billion.

The government decision to encourage cultivation of oil palm and to increase the country’s extent under the crop to 20,000 hectares was backed by comprehensive conditions and guidelines that would ensure there will be no environmental degradation, no deforestation and no replacement of other viable crops, Fernando added.

However, lobbyists had used the haphazard, unregulated and rapacious early expansion of oil palm cultivation in countries such as Malaysia and Indonesia to create a baseless fear psychosis about the industry, disregarding the fact that Sri Lanka has cultivated less than 11,000 hectares in 50 years.

All News Advertisement

Business

ADB approves $100 million loan to boost skills development and jobs for youth in Sri Lanka

Published

8 hours ago

2026/10/2

Thilina Walpola

The Asian Development Bank (ADB) has approved a $100 million results-based loan to help Sri Lanka transform its technical and vocational education and training (TVET) system, equip more young people with industry-relevant skills, and strengthen the country’s competitiveness and inclusive growth.

The Skills Development System Transformation Program will support the Government of Sri Lanka’s efforts in improving the quality and relevance of skills training, strengthening links between training providers and industries, and expanding employment opportunities for youth. The program will increase women’s employment opportunities in nontraditional jobs in fields including automotive technology, engineering, information and communications technology, construction, and renewable energy.

“A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness,” said ADB Country Director for Sri Lanka Shannon Cowlin. “This program will help create stronger pathways from education to employment by making training more responsive to industry needs, expanding opportunities for young people and women, and ensuring that graduates have the skills required by a modern and evolving economy.”

Though Sri Lanka’s economy is recovering, it faces skills shortages in priority sectors, high youth unemployment, and low female labor force participation. Many employers report difficulty finding workers with the skills needed in a changing economy.

Aligned with the Government of Sri Lanka’s Technical and Vocational Education and Training Sector Strategic Framework 2026–2035, the nationwide program will be implemented from 2027 to 2031 and is expected to directly benefit more than 100,000 young people through improved access to quality, employment-oriented training.

Business

USD 40.84m pipeline to secure aviation fuel supplies to BIA

Published

8 hours ago

2026/10/2

Thilina Walpola

By Ifham Nizam

The government has cleared a USD 40.84 million and Rs. 8,548.75 million contract to build a dedicated aviation fuel pipeline from Muthurajawela to Bandaranaike International Airport (BIA), alongside a massive new fuel storage facility with a capacity of 92,000 cubic metres.

Energy Minister Anura Karunatilaka said the project represented a major investment in strengthening the infrastructure underpinning Sri Lanka’s aviation fuel supply and ensuring more reliable fuel availability at the country’s main international airport.

‘This project will provide the infrastructure required to strengthen the reliability and continuity of aviation fuel supplies to Bandaranaike International Airport, Karunatilaka said.

The contract has been awarded to China Petroleum Pipeline Engineering Company Limited, following an international competitive procurement process in which three bids were received.

The project will see a new aviation fuel storage tank complex constructed at Muthurajawela, together with the associated infrastructure required for handling and transferring aviation fuel.

Business

CSE activity up, turnover weak at Rs. 1.4 billion

Published

8 hours ago

2026/10/2

Thilina Walpola

By Hiran H Senewiratne

Trading activity on the Colombo Stock Exchange (CSE) gathered pace yesterday as global fuel prices began to show signs of easing, according to market analysts.In this context, both indices moved upwards. All Share Price Index up by 67.97 points while S and P SL20 up by 8.30 points.

Turnover stood at Rs 1.4 billion with seven crossings. Those crossings were reported in Sampath Bank 1.7 million shares crossed to the tune of Rs 238 million and its share price traded at Rs 140, Access Engineering two million shares crossed to the tune of Rs 159 million and its share price traded at Rs 79.50, LOLC one million shares crossed to the tune of Rs 129 million and its share price traded at Rs 129, HNB 100,000 shares crossed to the tune of Rs 38.4 million and its share price traded at Rs 384, JKH 1.9 million shares crossed to the tune of Rs 35 million and its share price traded at Rs 18.60, Hayleys 100,000 shares crossed to the tune of Rs 22.50 million and its share price traded at Rs 225 and Richard Pieris 847,000 shares crossed to the tune of Rs 22 million and its share price traded at Rs 25.50.

In the retail market top seven companies that have mainly contributed to the turnover were Sampath Bank Rs 114 million (813,000 shares traded), JKH Rs 100 million (5.3 million shares traded) LB Finance Rs 49 million (325,000 shares traded), HNB Finance Rs 30 million (27 million shares traded), HNB Rs 27 million (70000 shares traded), NTB Rs 25 million (82000 shares traded ) and Lanka IOC Rs 21 million (666,000 shares traded). During the day 65 million shares volumes changed hands in 10433 transactions.

The Banking and manufacturing sector counters performed well. In the banking sector Sampath Bank let the market while manufacturing sector especially JKH also significantly performed well. With the fuel revision Land IOC also a significant stock at the floor.

Meanwhile, First Capital Treasuries said that Ramesh Schaffter resigned as a Non-Independent Non-Executive Director with effect from October 1, to facilitate the restructuring of the company’s board.

Yesterday the Central Bank announced the US Dollar rate as against rupee. The rupee was quoted flat at Rs 330.65/80 to the US dollar in the spot market , while bond yields dropped, dealers said.