Oil palm industry has huge potential
Veteran plantation industry expert and Chief Executive Officer of
Watawala Plantations PLC, Dr. Dan Seevaratnam recently extolled the
virtues of increasing oil palm production locally.

Oil palm plantation, Thalgaswela Estate |
"I am a believer in outcomes and not just outputs," said Seevaratnam.
"Around 95 percent of edible oils consumed in Sri Lanka is imported
at huge cost. We need to see what the cost is in economic terms and the
economic contribution to nation building".
The local oil palm industry is considered as an industry with huge
potential and its products can be used for a wide range of purposes. "If
we produce our own oil we would save a great deal of foreign exchange
and substitution of edible oil imports underscores the rationale for oil
palm cultivation" he said.
Oil palm has a potential oil yield of 3,000 to 4,000 litres per
hectare per annum. In comparison, coconut yields just 700 litres per
hectare. Alternatives such as sunflower oil yields 600 litres per
hectare per year, and soya-bean oil has an output of only 460 litres per
hectare per year.
Oil palm is also a high yielding crop and profitable, making it ideal
for companies looking to diversify even in a situation where there is
limited land, Dr. Seevaratnam said.
In addition, the labour requirement for oil palm cultivation is much
less, with just one worker to cultivate 10 hectares of crop, unlike tea
which needs two or three workers per hectare.
Similarly an oil palm harvester earns from Rs. 65,000 to Rs. 105,000
a month when compared to a good tea plucker's average income of Rs.
25,000 per month.
High yield coupled with low resource intensity also means higher
profits, he said.
Crude palm oil earns an estimated Rs.150,000 to Rs. 200,000 per
hectare, while rubber is struggling to make profits.
Dr. Seevaratnam stressed the need for local authorities to recognise
the advantages of import substitution and its contribution to the
economy.

The AEN palm oil factory at Baduraliya |
"Apart from being in the industry for many years and cultivating
millions of hectares, Malaysia and Indonesia have brought in vital
foreign exchange to their economies. Sri Lanka could certainly benefit
by following a similar strategy," said Director and Head of Business
Development and Plantations at Aitken Spence PLC and Managing Director,
Elpitiya Plantations PLC, Dr. Rohan Fernando.
"At the same time, investment cost for oil palm is lower than that of
crops such as tea and rubber," he said.
Labour use too was lower than for other alternatives. Hidden
advantages are that this crop cannot be stolen from plantations, unlike
scrap rubber or even tea leaves.
According to Dr. Fernando, the potential for import substitution was
one of the most compelling reasons to diversify. This is especially so
given that oil palm has such a stable market internationally, with a
diverse array of consumers.
Sri Lanka needs to look seriously at diversifying and increasing its
production of palm oil to develop the industry to be on a par with other
countries, he said.
Diversification into oil palm cultivation has revealed impressive
results in terms of high productivity, improved value addition and
export capability. It is a win-win operation for plantation companies,
domestic consumers and the country. |