04.05.2020 (International-Ceylon Daily News) - The recent increase of the import taxes of Palm Oil which is essential fat required by the confectioners and bakers of Sri-Lanka is going to cause significant stress and impose additional burdens to both the manufactures and the consumers of these products.
The taxes on Palm Oil was increased by Rs. 100 per kilo, and since there aren’t any local substitutes that can meet the demand for this product the Confectionery industry will lose of Rs. 100 million per month. According to D Suriyakumara, who is the Chairman of the Lanka Confectionery Manufacturers Association (LCMA), in this current economic environment such a loss will have very negative impact on the operations of all confectionery manufacturers.
The Sri-Lankan confectionery industry is unique in the sense that despite the constant threat of foreign competition the industry has retained 100% Sri-Lankan ownership and has provided the Sri-Lankan consumers with products that are even better than what is seen in foreign countries. The industry consists of companies producing Biscuits, Cookies, Cakes, Wafers, Toffees, Chocolates, Desserts, Snacks, Ice Cream etc.,
This industry which was built on over many decades of hard work and contributes around over 85,000 MT per annum to the national food supply chain. The contribution to annual taxes are are immense and these confectionery companies have been exporting to over 40 countries with an annual export income of USD 100 million.The industry employs over 50,000 people directly and over 500,000 people indirectly through national supply chain network involving over 150,000 retailers across the country.
Suriyakumara added that coconut oil cannot be used as an alternative; hence manufacturers will be compelled to import Palm Oil at the increased prices. The Lanka Confectionery Manufacturers Association has requested that the government look into this tax increase of Palm Oil, and the hope is that the government will be mindful of the impact that this will cause to the end consumer during this time of economic downturn. They believe that if this special commodity levy is not removed it will be very difficult for manufactures to maintain current prices.