|
|
 |
 |
| Sunday, 10 February 2002 |
 |
|
 |
Features |  |
| News Business Features Editorial
|
The palm of controversy by JAYANTHI LIYANAGE
A bend around the hilly Nakiyadeniya-Galle road and suddenly, they were all around us. Over two decades old, gaunt, prehistoric-looking palms towering on the slope above and below us. Light hardly filtered through the thick fronds and Nakiyadeniya Estate-interior was dark. "It's like Jurassic Park," gasped Frances, my colleague, as we both stared intently, trying to fathom the recent controversy shrouding Elaeis guineensis Jacq. or "Katupol" (Prickly Coconut) as our villagers prefered to call Oil Palm. To plantation companies, riddled with recurring losses in rubber and lured by hefty local demand of 80,000 MT of palm oil derivatives (of which nearly 90% is imported), oil palm is a beckoning alternative. A diversity crop and a high-potential import substitute, which could keep them viable through flagging rubber and coconut prices.
Last year, Nakiyadeniya, the oldest oil palm estate in the country, owned by Watawala Plantations Ltd., recorded a loss of Rs. four million in rubber while oil palm brought in a profit of Rs. ten million. "Coconut gave us a profit of Rs. 2 per nut," said Milton Wijepala, Mill Manager, Nakiyadeniya Oil Mills. In Elpitiya Plantations Ltd., the story is not much different. "We had losses of Rs. 2.8 million and 2.5 million in rubber respectively, last year and the year before," said Prema Opanayake, Manager, Talgaswela Estate. But the ten-year old oil palms recorded profits of Rs. 944,489 and Rs. 220,649 and coconuts, a lesser profit. "For an expenditure of Rs. 250,000 per hectare in rubber, we are running at a loss," said Linton Fernando, Consultant, Keells Plantation Management Services (Pvt) Ltd., which runs Namunukula Plantations. But their tender oil palms project posted an increased profit of Rs. 50,000 per hectare in the fifth year for an expenditure of Rs. 160,000 per hectare. Of the Sri Lanka's total extent of 45,000 hectares of coconut, 70% are aged over 60 years and replants come merely to 13%. The industry, severely flogged by rainfall fluctuations, lost 5.5 lakhs of plants in the recent drought and have lost land due to housing projects.
Recently, a nut shot up to as high as Rs. 22. "Rubber production went down to 87,000 metric tons in the year 2000 and many smallholders abandoned rubber plots," said Dr. L.M.K. Tillekeratne, Director, Rubber Research Institute. "Right now, only estates are producing top quality rubber - RSS 1, 2, 3 - which again, is in low quantities." Manuja Abyesekera, Manager, Nakiyadeniya Oil Palm Estate said, "Two weeks ago, the average rubber rate per kilo was Rs. 48 while our production cost was Rs. 78." In this scenario, should Sri Lanka invest more in upgrading traditional rubber and coconut or in expanding oil palm? The small man prefers coconut oil to the more expensive palm oil for cooking needs. But, is the local coconut industry a likely candidate to meet the country's overall demand? Palm oil appears to be the cheapest source of vegetable oil as against soya oil or sun flower oil. "Due to the shortage of coconut oil, 15% coconut oil is mixed with imported palm oil and sold to consumers," Prema Opanayake said. "At present, we don't produce cooking oil but hope to diversify into value-addition by opening an oil-refinery to produce edible oil," Abeysekera said of the country's sole Mill producing crude palm oil at Nakiyadeniya. Their major buyers are local manufacturers of soap and margarine. Fears voiced by the Southern Provincial Council on ills of "Katupol" last year, prompted the Coconut Research Institute (CRI) to conduct a study which strengthens the rationale that growing oil palm could essentially meet the local demand of palm olein and stearin and stem the flow of foreign exchange wasted on imports at US $ 350 per MT. Smallholders contribute much to a national production. But unlike rubber and coconut, oil palm cultivation has not spread to the small-grower except in Udugama where he has easy access to the Nakiyadeniya Mills. The hurdle lies in the fact that fresh fruit bunches need to be taken to the Mills within 24 hours of being plucked and processed within three days. Oil palm still remains the domain of privatised estates, namely, Watawala, Elpitiya, Namunukula and Agalawatte Plantations. But wider-spread small-holding is expected when a second Mill opens in Kalutara. "This should be operational by 2003", said Linton Fernando. Chandra Wickrematunge, Director-Operations, Keells Plantations, says the range of value-addition explored in Malaysian oil palming extend to glycerine, cosmetics, chocolates and even bio-diesel. "They use oil palm wood to make steering wheels, taxometers and cubbies of vehicles. One can generate one's own power requirement by wood and steam", Wickrematunge added. "Within two years, we will have a facility to generate steam from palm fruit fibres", Milton Wijepala was confident. Wickrematunge assured, "We will only replace uneconomical rubber with oil palm and our best rubber will remain. Less than 2% local rubber production doesn't have an impact on the world market". Galle and Kalutara districts are ideal for oil palm. As a timber and firewood source, oil palm scores low. In Talgaswela, we saw dry fronds rotting under palms with no village women carrying them home for home fires. "Thorns of the fronds keep them away", said Opanayake. Lime kilns prefer rubber wood to palm stumps. Bakeries say that rubber burn without giving bad taste to bread. "I don't discourage trial planting of oil palm in 3,000 hectares as approved by the Ministry of Plantation Industries (MPI)," said Dr. Tillekeratne. "But in exceeding this, possible repercussions should be studied." The country faces a severe shortage of rubber sheets RSS 1 and 2, manufactured in our estates and required for cycle tubes and inflated material. "In Malaysia, 87% rubber plantation is in the hands of small-growers and they account for 77% production". Indonesia will stop exporting timber to Sri Lanka from 2005 and rubber wood is a good alternative, Dr. Tillekeratne added. "Local rubber estates have not been manured for lack of money and oil palm fertilizer costs six times more than rubber fertilizer. Value addition is higher in rubber than in any other raw material". He points out that in Malaysia where the raw rubber industry has crashed to the fourth position among producing countries and depends on Thailand for 40% of its needs, the Government offers a higher subsidy to revert to rubber from oil palm. "Our Labour Laws require estate workers to be given a minimum of 24 days of sundry work. Then, will the low labour requirement in oil palm industry be benefical to Sri Lanka?", Dr. Tillekeratne asked. "Our Rubber Policy should be reviewed carefully if we are to avoid problems faced by Malaysia which has about 3.5 million hectares in oil palm". An official from the Ministry of MPI assured that a massive hectarage in oil-palm cultivation is not envisaged. "Based on CRI recommendations, we have allowed estates to venture into this. Should there be a demand for mass-scale cultivation, the Ministry needs to conduct a national-level survey before giving it the green-light". CRI recommends a conversion of 15,000 - 20,000 hectares of land into oil palm to achieve a 4 tons/hectare production to meet domestic needs. Therefore, as expressed by plantation companies, a research arm in CRI for a deeper study into the oil palm industry seems very prudent. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
Import price of oil palm is Rs. 40 a seed.
