Oil palm more profitable than tea or rubber – University Don

It’s a crying shame to see that the authorities have cold shouldered the oil palm plantations which could not only bring economic wellbeing to agro communities but can also save a huge amount of forex which is drained on import of edible oils, said Director/Agriculture Education Unit, University of Peradeniya, Prof. Buddhi Marambe.

The foreign exchange spent on importing vegetable oil is approximately 65% of the total export earnings from coconut kernel products. He said that though there were several theories that palm oil could damage the environment it is not so. “These are all fears created by pressure groups based on non-scientific evidence.”

He said that hence oil palm cultivation should be permitted again and as it will give a better return.

“However, the authorities must ensure that oil palm cultivators do not use forest land for cultivation.”

He said he endorses the move to replace aging rubber or tea plantations with oil palm. “A farmer can definitely get more than what he earns from both rubber and tea by venturing into oil palm cultivation.”

This is also not a labour intensive crop and hence a grower can also engage in another business to supplement his income.

Palm Oil Industry Overview

Palm oil is the world’s most widely used industrial frying fat used to make cooking oil and frying fat, margarines, shortenings, Vanaspati, bakery fat, palm stearin and palm olein, cereals bars, noodles, potato chips, chocolates, confectionery, caramel, toffee and fudges, non-dairy creamers, ice cream, processed cheese, yoghurt, soup mixes and animal feed and also for bio-diesel.

Palm oil is currently the most consumed edible oil in the world. Global edible oil production has increased with a CAGR of around 4% over the past decades. The demand and consumption of palm oil has increased by over 200% over the past three decades.

Palm Oil Ban

The palm oil cultivation which was egged on by the Government previously suddenly took a u-turn in 2021 when a panel of environmental experts made recommendations from a 2018 report linking oil palm plantations to soil erosion and the drying up of water sources. Regional Plantation companies had by this time, invested around Rs. 500 million to put up nurseries and today this investment had gone down the drain as these plants are now no use.

An Emeritus Professor in the Faculty of Agriculture at Wayamba University, Asoka Nugawela, took issue with the CEA expert panel’s suggestion that oil palm plantations could dry up local water sources.

He said oil palm in Sri Lanka is generally cultivated in areas where annual rainfall exceeds 3,500 millimeters (138 inches), while their water requirement is about 1,300 mm (51 in). So the argument that they could cause springs to run dry isn’t true, Nugawela said.

“If you visit oil palm plantations, you can witness healthily flowing streams full of life,” he said.

Oil Palm Industry in Sri Lanka

Total edible and non-edible oil requirement: 180,000 MT, Edible oil requirement: 90,000 MT, local palm oil production: 25,000-28,000 (30% of local oil production and 19% of the total oil supply).

In 2021, 67,679 MT of coconut oil and 29,731 MT of palm oil were locally produced, and 202,289 MT of oil was imported at a cost Rs. 57 billion (Monthly Bulletin of the Coconut Development Authority, December 2022). If 20,000 ha of oil palm were cultivated in Sri Lanka (as planned in 2014), 50% of the total edible requirement would have been fulfilled from the locally produced palm oil in a plantation extent of 11,000 ha (1% of total agricultural land extent), cultivated in Galle, Kalutara, Ratnapura, Matara and Kegalle districts.

Saving foreign exchange by the reduction of vegetable oil imports, reducing the variations of the prices for coconuts in the local market, sustainable use of the land, use of uncultivated bare land, supply of quality palm oil to the local market would a few benefits the country could achieve by lifting the ban.