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Slump in imports trigger surge in coconut oil prices



By Suresh Perera

With the drastic drop in imports, coconut oil prices in the market have surged to a new high as local production is grossly insufficient to meet the annual consumption of around 200,000 metric tons, industry officials said.

In 2020, local coconut oil production was a negligible 20,000MT, which translated into a yawning gap that had to be bridged by importing 180,000MT, they said.

“This has been the position over the past few years as dominant imports dwarfed local supplies”, they pointed out.

The ban on the import of palm oil has also compounded the issue as customers will now have to depend wholly on coconut oil resulting in inevitable pressure on the demand curve, they pointed out.

Prices have soared with a 750ml bottle of coconut oil fetching Rs. 550-600 in the local market, they said, while predicting the upward trend to continue due to short supply.

The local production of coconut oil fell by the wayside as high prices of nuts was a challenge to compete with imports, says M. L. D. Niroshana, Director-General of the Coconut Development Authority.

On an average price of Rs. 85 each, it requires nine to ten nuts to extract a litre of coconut oil, and they need to sell a 750ml bottle for around Rs. 500 to make a small profit. However, this was not feasible when imports were available at a more competitive price, he noted.

Earlier, a 750ml bottle of coconut oil was selling at anything between Rs. 320-380. With the slump in imports following the aflatoxins controversy, prices have zoomed as supply can no longer meet the demand, market sources said.

Consignments of palm oil imported before the ban was announced are still available in the marketplace, but after existing stocks are lapped up, there will be more pressure exerted on the demand for coconut oil that’s bound to see prices going through the roof, they warned.

“Market forces are at play because there existed a big gap between imports and local production of coconut oil. With many importers now reluctant to order fresh stocks due to uncertainty over contamination fears, and coupled with the ban on palm oil, the market is grappling with the demand for this essential consumer commodity”, Niroshana outlined.

Sri Lanka’s production in 2020 was 2,760 million nuts, which fell short of the 3,000 million target. The figure was envisaged to reach 3,600 million at peak. During October, November, December and January, there’s a shortage of nuts, but production picks up with an increase in yield during May-August.

“There is neither a short-term solution nor a question of expediting the production process as it takes 10 years for coconut trees to yield. The government grants a subsidy for fertilizer and water to growers in a bid to push up production”, Niroshana elaborated.

As in any business, private millers are also driven by profits. In the short-term, the price of nuts cannot be expected to dip to Rs. 35-45 each for millers to make a margin by selling coconut oil, the Director-General said.

As long as nut prices remain high, local coconut oil will also be costly as they go hand in hand, he pointed out. “More millers will be encouraged to take to extracting coconut oil if imports are limited and market conditions and prices are good”.

On the other hand, the export of copra is more lucrative as prices are attractive in foreign markets. This segment earned an export income of US$ 661 million in 2020, Niroshana further said.

In a bid to mitigate the ballooning prices in the market, the government has permitted only the state-owned BCC Lanka to import desiccated coconut up to a maximum of 13,000MT per month under a Special Commodity Levy (SCL) of one rupee per kilo, industry officials said.

On the recommendation of the Industries Ministry, the consignments will be allowed for a period of three months with effect from April 28, 2021, they said.

The stocks are likely to be imported from Indonesia instead of India because of the raging coronavirus pandemic there, they noted.

According to a Finance Ministry directive, a SCL of Rs. 300 per kilo will be imposed on importers of desiccated coconut.

Retail coconut prices still remain relatively high with each fetching anything between Rs. 85-100 depending on the size, market sources said.

A coconut grower in Nattandiya said the average farmgate price for nuts has now dropped to Rs. 50-55 each. In the case of small nuts, two are sold for the price of an average nut.

He said the average farmgate price was Rs. 75 each about one and a half months ago when retail market prices shot up to Rs. 100-125 per nut.



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MONLAR: Govt. has fallen for millers’ ruse



By Rathindra Kuruwita

Farmers would be harvesting their paddy by the time the government imports 100,000 tonnes of rice and it would lead to a decrease in prices they received from millers, Chinthaka Rajapakshe, Moderator of the Movement for Land and Agricultural Reform (MONLAR) warned yesterday.

Addressing a post-Cabinet Press Conference on Monday, co-Cabinet spokesman and Media Minister Keheliya Rambukwella announced that the Cabinet had approved the import of 100,000 tonnes of rice to increase competition in the market.

Rajapakshe commented that successive governments had been importing large quantities of rice close to the harvesting period.

“Several large mill owners create an artificial shortage of rice when the harvesting season nears. The government responds by importing large quantities of rice, often of dubious quality.  The paddy prices collapse, allowing mill owners to buy paddy from farmers at dirt cheap prices and then the mill owners release some of the stocks they have to the market. Given that Sri Lankans prefer to eat Sri Lankan varieties and that the imported rice is of poor quality; no one buys the imported rice,” Rajapakshe said.

 The MONLAR moderator said that there was an assumption that the Yala harvest would be low because of the impact of fertiliser shortages on rice production. There had been reports that rice plants were yellowing and their growth was retarded due to a shortage of nitrogen.

 Commenting on the allegations that there was a shortage of fertiliser, Minister of Plantation, Ramesh Pathirana told The Island that by the next paddy season the government would be able to provide adequate amounts of compost fertiliser. “There will be some difficulties in the next few months. We must work together to face them. Everyone agrees that organic agriculture is good, but some think the government’s decision was too hasty. However, by the time the Maha season starts we will have enough fertiliser stocks. We are also ready to compensate farmers if there are issues in the current season.”

In response,  Rajapakshe said that it was not too late to address the issues that had arisen from nitrogen shortages and questioned how the government had decided that it needed to import 100,000 tonnes of rice, given that it had not studied the impact of fertiliser shortage on the paddy harvest.

“How on earth did they come up with this number? Obviously, this is a scheme to enrich a few businessmen, politicians and some officials. The government should empower farmers’ associations, cooperatives and small mill owners if it wants to find a permanent solution to annual rice shortages experienced by the people,” he said.

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Wijeyadasa no longer considers himself govt. member



By Shamindra Ferdinando

SLPP lawmaker Dr. Wijeyadasa Rajapakse, PC, says he no longer considers himself as a member of the ruling party.

Asked to comment on his present status, the Justice Minister, in the previous UNP regime, said that he had stopped participating in SLPP group meetings since the passage of the 20th Amendment to the Constitution in Oct last year.

Dr. Rajapakse, who entered Parliament from the Colombo District on the SLPP ticket at the August 2020 general election, voted for 20th Amendment despite his criticism of it. In the previous Parliament, Dr. Rajapakse represented the UNP.

Responding to another query, Rajapakse said that the SLPP had refrained from appointing him to any committee though he had in the past served and in some instances headed important outfits, such as the Committee on Public Enterprises (COPE).

 The former minister alleged that the SLPP had caused so much turmoil that the country was now in a bind. Instead of taking the people into confidence the incumbent administration adopted strategies meant to suppress dissent.

 Commenting on what he called a severe economic crisis against the backdrop of the worsening Covid-19 epidemic, Dr. Rajapakse alleged that those at the helm lacked basic understanding to rationally address issues.

The former minister said that the government appeared to have ignored the growing threat of the EU going the whole hog in the wake of its parliament adopting a resolution against Sri Lanka.

The resolution expressed the concern of the European Parliament regarding the PTA (Prevention of Terrorism Act) and related human rights issues in Sri Lanka. It highlighted that the GSP+ status is linked to the implementation of 27 international conventions by Sri Lanka. The GSP+ monitoring process is conducted on a regular basis by the European Commission and the European External Action Service, the EU mission in Colombo told The Island.

The following is the relevant section from the EU resolution: “…Underlines that the GSP+ scheme offered to Sri Lanka has made a significant contribution to the country’s economy, from which exports to the EU have increased to EUR 2.3 billion, making the EU Sri Lanka’s second-largest export market; highlights the ongoing monitoring of Sri Lanka’s eligibility for GSP+ status and stresses that the continuance of GSP+ trade preferences is not automatic; calls on the Commission and the European External Action Service (EEAS) to take into due account current events when assessing Sri Lanka’s eligibility for GSP+ status; further calls on the Commission and the EEAS to use the GSP+ as a leverage to push for advancement on Sri Lanka’s human rights obligations and demand the repeal or replacement of the PTA, to carefully assess whether there is sufficient reason, as a last resort, to initiate a procedure for the temporary withdrawal of Sri Lanka’s GSP+ status and the benefits that come with it, and to report to Parliament on this matter as soon as possible.”

For want of a cohesive strategy, the SLPP hadn’t been able at least to rationally assess external and internal threats and take remedial measures, the MP said.

Referring to the passage of the Colombo Port City Economic Commission Bill, MP Rajapakse alleged that the government was on an extremely dangerous path. The EU resolution reflected the Western thinking and the current leadership acted as if China was our main buyers. How could they ignore the fact that the US and EU countries remain major contributors to the Sri Lanka economy though our decision-making process was aimed at satisfying China.



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Geneva concerned about deaths in police custody, Shani’s safety



The Sri Lanka Core Group has joined the Bar Association of Sri Lanka (BASL) in calling for what it calls independent and impartial investigations into deaths in police custody. The six-member grouping led by the UK has also stressed the need to ensure security of former CID Director SSP Shani Abeysekera, who recently received bail.

Abeysekera had been interdicted. The ex-CID Director has also figured in taped conversations with former MP Ranjan Ramanayake now serving a jail sentence for contempt of the Supreme Court, discussing how to fix certain court cases then being heard, especially against political opponents.

The following is the text of statement issued by Canada, Germany, North Macedonia, Malawi,

Montenegro and the UK at the 47th sessions of the Geneva-based United Nations Human Rights Council (UNHRC): “Council resolution 46/1 called upon the Sri Lankan Government to address the harmful legacies of war and to protect human rights, including for those from religious minorities. We regret the lack of progress on these issues, with a number of further concerning developments.

The Sri Lankan Government has attempted to dismiss a number of emblematic cases and to initiate criminal proceedings against individuals pursuing some of these cases. This counters the Council’s call for prompt, thorough and impartial investigations. We call for former CID director Shani Abeysekera’s safety to be ensured.

We are deeply concerned about the ongoing use of the Prevention of Terrorism Act and the recent intention to introduce a rehabilitation process lacking adequate judicial oversight. Human rights lawyer Hejaaz Hizbullah, and poet and teacher Ahnaf Jazeem, remain detained without trial and further arrests under this Act have continued, including among minority communities and the political opposition.

We remain concerned about the restrictions on memorialization . We join the Bar Association of Sri Lanka in requesting independent and impartial investigations into recent deaths in police custody

We are concerned over appointments to the Office on Missing Persons and reiterate the importance of ensuring independent and credible institutions to achieve justice.

We encourage Sri Lanka to cooperate with the Council and OHCHR in relation to resolution 46/1 and stand ready to support this.”



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