Palm-oil Industry in Sri Lanka: An Economic Analysis

Sri Lanka spends a considerable amount of foreign exchange on edible oil imports. In 2020, around LKR 37 billion was spent to meet 83% of the edible oil demand. Local edible oil sources are coconut oil and palm oil. Other potential alternatives have not yet been adequately explored. Considering the rising demand for edible oil imports, oil palm cultivation was promoted by the government in 12,000 Ha of unproductive lands as an import substitution strategy. However, the decision was reversed with escalating concerns on environmental cost of cultivating this exotic crop and ambiguous health concerns of consuming palm oil. However, the stakeholders of this industry have concerns on their investments, fairness of the conclusions on environmental cost and health claims. This study will revisit the policy decisions on palm oil industry and its misapprehensions which will be a guideline for policy recommendations and public awareness.

Research team

Dr. Erandathie Pathiraja
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