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Thursday December 1st, 2022

Sri Lanka to allow palm stearin imports, other fractions ‘unhealthy’

ECONOMYNEXT – Sri Lanka will allow palm stearin, a fraction of palm oil produced through an industrial process used in food products, but not other palm oil as they were ‘unhealthy’ a government statement said.

“President Gotabaya Rajapaksa had decided to ban the import of palm oil with immediate effect as the consumption of crude palm oil has adverse effects on public health,” the President’s office said in a statement.

“Experts in medical field and dieticians have repeatedly pointed out that the consumption of food processed using crude palm oil is a major pathogen.”

It is not clear who used crude palm oil in Sri Lanka other than refineries as a feedstock.

“However, standard palm oil varieties are used in the production of biscuits, confectionery and some bakery products,” the statement said.

“The variant bearing harmonized system code 1511.90.10 is an example. It is commonly known as Palm Stearin. There is no prohibition to the importation of this variety for use in the production of relevant food items.”

Palm stearin is a heavy, processed component palm oil, that solidifies in cooler places and has a high percentage of saturated fats, and is used to make foods and margarine.

Palm Olein, commonly used for frying is a lighter component remains liquid in at similar temperatures.

The statement did not cite any studies to show why or whther palm stearin was ‘healthier’ than alternatives such as coconut oil or palm olein, commonly used in frying.

The idea that tropical oils such as palm oil (widely used in West Africa for centuries) and coconut oil was unhealthy has been controversial.

There is a global craze now regarding refined virgin coconut oil, where Thailand is a top exporter and Sri Lanka is also joining the bandwagon.

Palm oil cultivation was is also banned in Sri Lanka. Palm oil has generally come under fire due to deforestation of rainforest in Malaysia and Indonesia destroying the habitat of Orangutan in particular. There are no Orangutan in Sri Lanka.

“Research has revealed that oil palm cultivation can lead to long-term adverse environmental effects, such as depletion of water resources and soil infertility,” the statement claimed.

The statement did not cite any studies. However it known that oil palm yields are higher in areas with higher rainfall.

In Sri Lanka’s palm oil is viable because of high taxes on coconut oil to give profits to the coconut landowner lobby.

“After the current government’s coming into power, the importation of Ethanol, which had been severely criticized in the recent past, was completely halted,” the statement claimed.

“But Ethanol is allowed to be imported for surgical purposes. The same goes for the permission to import palm stearin.”

Following the ethanol ban several domestic producers including an expropriated state sugar enterprise is making large profits. (Colombo/Apr11/2021)

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Sri Lanka China-backed port to welcome second cruise ship

ECONOMYNEXT – Sri Lanka’s China-backed Hambantota Port said it was getting ready to welcome MV Azamara Quest, a cruise ship, as another passenger vessel departed.

Mein Schiff 5, operated by TUI had departed Hambantota International Port for Pulau Penang Island, Malaysia on November.

“As well as being her maiden call at the port, Mein Schiff 5 is the first passenger cruise ship to call at the port since the pandemic began,” said Johnson Liu, CEO of Hambantota International Port Group (HIPG) said in a statement.

“It was undoubtedly a great boost for the tourist economy in the south when the vessel called at the Hambantota International Port.”

Mein Schiff 5’s passengers had also visited the Bundala National Park, Hambantota Botanical Gardens, Galle and Kataragama.

Passengers had explored Hambantota by tuk-tuk, while others had enjoyed the beaches in the Shangri La Hotel, the port said.

MV Azamara Quest will arrive in Hambanota on on December 05. (Colombo/Dec01/2022)

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Sri Lanka’s shares gain in mid market trade

EXONOMYNEXT- Sri Lanka’s shares gained in mid market trade on Thursday (1), pushed up by strong positive sentiments on interest rates easing in line with inflation and speculation on government to hold talks with multilateral creditors ADB and World Bank for a possible loan facility.

Market has continued to gain for the past four sessions.

“Shares were moving on positive strong sentiments flowing in from yesterday (30), we are seeing a rally in the hotels, while the retail favorites such as LIOC and Expolanka,” analysts said.

Positive investor sentiments have been established, from positive comments from the Governor of the Central Bank over market rates eventually seeing an ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.

Analysts further stated that, Treasury related stocks are also activated due to downward movements in yield.

All Share Price Index (ASPI) gained by 1.4 percent or 123.41 points to 8,774.64, while the most liquid share gained by 1.31% or 35.68 points to 2,765.

The market generated a turnover of 1.6 billion rupees at 1130 hours. (Colombo/Dec1/2022)

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Sri Lanka electricity losses from overpriced fuel, no tariff hike considered: regulator

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board’s high operating costs are partly due to excessive prices paid for fuel and no tariff hike is being considered, Chairman of the Public Utilities Commission of Sri Lanka, Janaka Ratnayake said.

The CEB itself does not buy fuel but depends on state-run Ceylon Petroleum Corporation and Lanka Coal, another state firm to buy fuel. Both firms are periodically caught in procurement scandals.

“They are paying about 385 plus rupees per litre for furnace oil,” Ratnayaka told EconomyNext.

“That is too much. From the global market we can buy it to much lower price. It can be imported below 200 rupees,”

“I ask the government to take the necessary steps to create a system to import furnace oil, like they did for fuel, to be imported at the lower price levels. If that happens, we can go without going for a price hike.”

Sri Lanka’s CEB generally gets furnace oil and residual oil from the domestic refinery and usually do not import furnace oil.

The refinery however is not regularly operating due to inability to get crude amidst the worst currency crisis in the history of the island’s intermediate regime central bank.

Ratnayake had earlier brought to light import costs of the CPC.

Pushing for operations efficiency of the CEB is a role of the regulator. Regulating costs based on global benchmark prices to push for procurement efficiencies is a standard practice. However the PUCSL is not the official regulator of the petroleum sector.

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Sri Lanka power tariff revisions sought in Jan and July: Minister

Power and Energy Minister Kanchana Wijesekera told parliament that cabinet approval was sought to twice yearly tariff hikes in January and July of each year.

No Electricity tariff hikes are being considered yet, Ratnayake said.

Wijesekera blamed the regulator as well as successive administrations for not regularly revising power prices and pushing the sector into crisis.

In Sri Lanka activists had also blocked cheap coal power. (Colombo/Dec01/2022)

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