The reduction in the import duty rate for edible palm oils will not threaten the local coconut oil industry, said the President of the Coconut Products Exporters’ Association. "The price of refined palm oil in the world market is about Rs 150 per kilogram. The landed cost works out to around Rs. 195 with the addition of the import duty and other levies. Locally manufactured coconut oil always demands a premium of about Rs 10 to 15 per kilogram over imported palm oil so this means that the price of coconut oil will not decline below Rs. 210 per kilogram," the association’s President, Tharaka Dadagamuwa, said. "Therefore it is impossible for the farm gate price of coconuts to fall below Rs 22 or 23 per nut. The Chairman of the Coconut Cultivation Board mentioned at a recent forum that the cost of production is about Rs. 12 per nut. "Prior to the reduction in tariff, consumers were buying coconuts for about Rs 45 and coconut oil for Rs 315 per kilogram and these prices were the highest compared to all other coconut producing countries," he pointed out. He said that although the import tax had been reduced to five percent that cess, VAT, surcharge and other levies add to over 30 percent for palm oil imports, which means that the local coconut oil industry still has protection and the industry will continue to function viably and that the coconut oil producers’ fears were unfounded. "Palm oil is the cheapest edible oil available in the world market and it is fair that the consumers be given a choice between palm oil and coconut oil, or even other edible oils," Dadagamuwa said. However, he pointed out that the tariff protection still given to the coconut oil industry will continue to assist the millers to be in production as they are still in an advantageous position to pay higher prices for coconuts. He said that for the past three months coconut based export industries virtually shut down resulting in layoffs. "The foreign exchange loss for the past three months alone amounts to Rs 2 billion. Thanks to the revision in the tariff rate on palm oil imports, the industries could be revived and employees will get their jobs back again. |
