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Sri Lankan plantations press for oil palm support as profits surge

ECONOMYNEXT – Sri Lanka’s plantations industry has called for more support for palm oil as profits from the crop surged, exceeding that of tea and rubber, saying it needed less effort and labour, yielding healthy margins. 

The gross profits from palm oil in the four regional plantations companies (RPCs) growing the crop rose 66.6% to Rs.2.29 billion at the end of the 2016/17 financial year from a year ago, the Planters’ Association of Ceylon (PA) said in a statement.

The tea businesses of these same four RPCs yielded gross profits of just Rs. 75.2 million in the same period, largely owing to heavy losses at two firms from tea.

The companies have benefited from high global palm oil prices as demand exceeds supply and protective import tariffs on vegetable oils.

The Planters’ Association called for greater facilitation of engagement, investment with a gradual focus towards value addition in the oil palm sector.

“We commend the pioneering efforts of all Sri Lankan RPCs in relation to their proactive diversifications into the oil palm sector. We are confident that sustainably grown oil palm plantations hold the potential to rejuvenate the wider plantation industry.“

Oil palm profits expanded exponentially over the past year with the four regional plantation companies (RPCS) engaged in the business recording turnover growth of 44.2% Year-on-Year (YoY) up to Rs. 3.95 billion, while profits within the sector rose by 66.6% YoY to Rs.2.29 billion at the end of the 2016/17 financial year, the PA said.

Out of the 20 RPCs operating in Sri Lanka’s plantations sector, four – Watawala Plantations with 3,157 hectares, Namunukula Plantations with 2,041 hectares, Elpitiya Plantations 1,571 hectares, and Agalawatte Plantations with 1,311 hectares – have already established commercially viable oil palm plantations.

The full statement follows:

Oil palm profits expanded exponentially over the past year with the four regional plantation companies (RPCS) engaged in the business recording turnover growth of 44.2% Year-on-Year (YoY) up to Rs. 3.95 billion, while profits within the sector rose by 66.6% YoY to Rs.2.29 billion at the end of the 2016/17 financial year according to the most recent information released by the Planters Association of Ceylon (PA).

Out of the 20 RPCs operating in Sri Lanka’s plantations sector, four (04) – Watawala Plantations with 3,157 hectares, Namunukula Plantations with 2,041 hectares, Elpitiya Plantations 1,571 hectares, and Agalawatte Plantations with 1,311 hectares – have already established commercially viable oil palm plantations.

By way of comparison, revenue generated by the tea businesses of these same 4 RPCs reached Rs.7.62 billion during the same period, while profits hit Rs. 75.2 million.  Similarly, the rubber sector of these RPCs – exempting Watawala Plantations which is not engaged in the rubber business – recorded turnover of Rs. 1.04 billion but ultimately resulted in losses of Rs. 180.7 million during the same period.

Now home to oil palm plantations spanning 8,500 hectares, the continuing efforts by Sri Lanka’s RPCs to establish a thriving oil palm business in the country is aligned with the Sri Lankan Government’s ambitious goal of planting 20,000 hectares of oil palm.

Commending the remarkable performances of Sri Lanka’s oil palm producing Regional Plantation Companies (RPCs) over the recently concluded financial year, The Planters’ Association of Ceylon (PA) issued a statement calling for greater facilitation of engagement, investment with a gradual focus towards value addition in the oil palm sector.

“We commend the pioneering efforts of all Sri Lankan RPCs in relation to their proactive diversifications into the oil palm sector. We are confident that sustainably grown oil palm plantations hold the potential to rejuvenate the wider plantation industry.

“Particularly given the unprecedented and growing international demand for oil palm, the sector is anticipated to generate strong profitability over the medium term. In that regard, we encourage all plantation industry stakeholders to explore new ways to get engaged in the oil palm sector, either through sustainable cultivation or value-addition,” PA Chairman, Sunil Poholiyadde stated.

Over the recent past, more RPCs have also been making important progress in terms of oil palm diversifications, with Kegalle Plantations now working to plant 300 hectares having already established oil palm nurseries during the previous year. Similarly, Bogawantalawa Tea, Kotagala, Lalan Rubber, and Horana Plantations each launched their own oil palm projects during the past year and anticipate substantial contributions to revenue from this emerging segment over the medium-long term.    

Unfortunately, despite the remarkable potential for this crop to substantially improve the financial performance of Sri Lankan RPCs, and in turn, for those employed in the plantation sector, oil palm continues to face resistance at the local government and provincial council level.

“While the higher levels of Government have been supportive, unfortunately there is a lot of misinformation and outright lies being circulated among lower levels that is leading to serious challenges for RPCs seeking to make diversifications into oil palm. For our part, we are working to educate the general public about the tremendous potential that sustainably cultivated oil palm has to drastically improve the lives of those working in the sector, while providing invaluable support for RPCs that continue to face stiff challenges in tea and rubber cultivation,”  Poholiyadde explained.

Internationally, palm oil remains a ubiquitous part of modern life, being commonly utilized as primary ingredient in food, soaps, cosmetics, candles, bio-fuel, animal feed and many other consumer products. While approximately 64.5 million tonnes of palm oil was produced globally in 2016, demand for the commodity has outpaced global production.  

First established in Sri Lanka in the late 1960s, growing demand for sustainably grown oil palm ensures that the commodity commands strong prices while the effort required to cultivate the crop is much lower and less labour intensive than either tea or rubber with field level cost of production standing at Rs 20/Kg of fresh fruit bunches (FFB) as against a selling price of approximately Rs.40, enabling healthy profit margins for sustainable producers.

Leading performances during the financial year of 2016/17, was Watawala Plantations, whose substantial oil palm sector segment posted outstanding growth to close the year with revenue of Rs. 2.16 billion, as compared with Rs. 1.5 billion in financial year 2015/16 and profits  before tax (PBT) of Rs. 1.13 billion, improving significantly over the previous year’s Rs. 702.8 million.

Oil palm businesses also recorded considerable growth in other oil palm producing RPCs with Namunukula posting revenue of Rs. 898 million against a previous Rs.566 million, while gross profits from the segment stood at Rs. 602 million in FY2016/17, as compared with Rs. 347 million in FY2015/16.

The contribution of oil palm to Elpitiya Plantations revenue increased from Rs. 408 million to Rs. 619.6 million, generating a profit of Rs. 396.1 million by the end of the period in review, as compared with Rs. 202.2 million in the previous financial year. Meanwhile, Agalawatte Plantations posted revenue of Rs. 275.1 million as compared with Rs. 265.4 million leading to profits of Rs. 169.8 million, as compared with Rs. 127.3 million in the previous year.
(COLOMBO, November 30, 2017)
 

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Sri Lanka to introduce digital program for foreign workers facing problems

ECONOMYNEXT – Sri Lanka will introduce a digital program via smart phones for migrant workers to report any concerns while employed abroad, Minister of Labor and Foreign Employment Manusha Nanayakkara said.

“We will have a digital program that is accessible from their smart mobile phones where domestic workers can notify us if they have not got their salary or if they have fallen into some trouble,” Nanayakkara said in parliament on Tuesday.

Sri Lanka has sent 301,000 domestic workers and 360,000 skilled workers abroad, Nanayakkara said.

Several workers, especially domestic workers, face abuse at the hands of foreign employers.

Nanayakkara said that the government only receives 0.001 percent of complaints with regard to abuse.

“We can only act on complaints received from people who go through legal channels. We are educating those who go through the Foreign Employment Bureau on how to escalate complaints.” (Colombo/Jul23/2024)

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Sri Lanka cabinet approves apology from Muslims for COVID-19 cremation ahead of election

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers approved a proposal to tender apology for the grievance caused for ethnic minority Muslims due to the cremation of bodies during the Covid-19 pandemic, Foreign Minister Ali Sabry said.

The move comes ahead of the upcoming presidential poll in which Muslim votes are likely to become crucial for all candidates.

The government of former President Gotabaya Rajapaksa led by current ruling party Sri Lanka Podujana Peremuna (SLPP) forced Muslims and Christians to cremate the dead bodies of those who died of Covid-19 in 2020.

The   Organisation of Islamic Cooperation (OIC) which includes Islamic states globally raised the forced cremations issue at the 46th United Nations Human Rights Council (UNHRC) in February 2021 after the SLPP government rejected repeated requests by local and global Islamic bodies.

The policy was later reversed, but the move hit diplomatic ties with Middle Eastern and OIC nations which is the highest source of employment for Sri Lankan expatriates.

Former President Gotabaya Rajapaksa later said the decision was based on expert advice. Rajapaksa who was seen as an anti-Muslim leader was heavily criticized for his decision ahead of 2020 parliamentary polls while his elder brother and then Prime Minister Mahinda Rajapaksa declined to discuss the issue with Muslim parties which asked to reverse the decision.

Hundreds of Muslims were cremated during the Covid-19 period before Rajapaksa government allowed a separate burial ground for Muslim Covid-19 victims in the Eastern town of Oddamavadi.

“A joint Cabinet Paper presented by Ministers Ali Sabry, Wijeyadasa Rajapakshe & Jeevan Thondaman apologising for the grievance caused to the Sri Lankan Muslim community due to the cremation of bodies during the Covid-19 pandemic, approved by the Cabinet,” Minister Sabry  tweeted quoting Cabinet Spokesman.

Already President Ranil Wickremesinghe and Estate Infrastructure Minister Jeevan Thondaman had tendered an apology in the parliament. The latest cabinet move is a formal and official apology.

BURIAL OR CREMATION

Along with the apology, the Cabinet approved proposed law on burial or cremation of dead bodies on religious discretion.

“As stipulated in the guidelines published by the Ministry of Health on the Clinical Management of COVID19, cremation was made compulsory in removal of the dead bodies of the persons who died due to the COVID-19 virus. The decision created displeasure among the various religious groups and human right activists especially Muslim religious persons,” a government document on the cabinet decision showed.

“The studies made in this respect have been confirmed that the faeces and the urine are the primary source of transmission the virus but not with the safe burial. Therefore, in order to prevent arisen of such condition in future, attention has been drawn to introduce a law, a certain person or relations to be selected the burial or cremation of the dead person at their discretion.”

“Further, it has been seemed that introduction of new laws is appropriate to donate the dead bodies to the Medical Faculty, if necessary.”

“Accordingly, Cabinet of Ministers has approved the joint proposal presented by the Minister of Justice, Prison affairs and Constitution Reforms, Minister of Foreign affairs to instruct legal Draftsman in order to prepare a draft for the introduction of new law.”

Rajapaksa’s arrogant policy led the OIC and Middle East nations to reject Sri Lanka’s repeated requests for credit lines and loans to buy oil before the country collapsed following an unprecedented economic crisis in 2022.

Minister Sabry faced harsh criticism from human rights defenders and from members of the Muslim community for what they claimed was his silence in the face of the inhumane, unscientific decision by the Rajapaksa government.

The Rajapaksa government’s stubborn insistence on cremating Muslim and Christian victims of the Covid-19 virus was against the communities’ religious beliefs and drew widespread condemnation and concern of Muslim countries and leaders.

Rajapaksa, after the economic crisis hit the country, was forced to flee in the face of massive protests against him in July 2022. (Colombo/July 23/2024)

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Fireworks erupt in parliament over Sri Lanka’s VFS Global controversy

ECONOMYNEXT – Sri Lanka’s parliament erupted in heated debate after government legislators raised a privilege issue against Committee on Public Finance Chair Harsha de Silva, who last week tabled report on a controversial visa deal with the IVS-GBSVFS Global, consortium.

Justice Minister Wijedasa Rajapaksa questioned the propriety of raising a privilege issue against a Committee chairman, who was acting under powers derived from the Constitution, saying it amounted to challenging the Speaker himself.

Related Sri Lanka visa deal with IVS-VFS be cancelled or revised, forensic audited: COPF Chief

Sri Lanka’s Department of Immigration had awarded a visa issuing monopoly to IVS-GBS-VFS Global without tender which was charging 25 dollars per visa compared to an earlier 1 dollar by Mobitel, and it should be terminated or revised, de Silva said presenting a report earlier this month.

Privilege Over VFS Report

State Minister Shehan Semasinghe said de Silva had presented a defective and false report misleading parliament saying among other things that the report was unanimously approved by the COPF membership.

As a result, privileges of 16 members had been broken, and misleading a parliamentary committee was a punishable offence and de Silva should be referred to the privileges committee.

De Silva said he severally and individually rejected the charges and all views of the members were attached to the final report and he would stand down as COPF chair until the matter was decided.

“This was not done secretly. There were three weeks for members to respond,” de Silva said.

“There was a debate about the tourism arrival numbers, which was included. If I am to be imprisoned, do it. I am not afraid. Give me an opportunity and I will show how each word is true.

Semasinghe said there was no desire on the part of government members to remove de Silva from the COPF.

Government member Nimal Lanza said that he was under the impression that tourist arrivals had fallen due to the VFS deal but there was an increase this year. There was no desire to imprison de Silva, he said.

Verbal Exchange

Public Security Minister Tiran Alles said five years of data was given, and there was an increase in tourism arrivals. And after April there were 53,000 tourists under new categories, which brought revenues of 1.4 billion rupees.

The report was also attached as an addendum, de Silva said.

Minister Alles questioned why the Deputy Speaker was allowing a debate over the VFS deal which would now attract media headlines.

“If you are allowed, all our members must be allowed to speak,” he said.

Opposition leader Sajith Premadasa said if competitive tenders were called, there would not have been a charge of 25 dollars per visa as Mobitel was charging only one dollar.

Premadasa said he was responding due to charges made against de Silva and claims that he had committed a punishable offence. The opposition leader questioned how his microphone was muted.

Justice Minister Wijedasa Rajapaksa said while it was fair to allow de Silva to respond to the initial charge, a long debate should not have been allowed on the matter and also the contents of the report.

“The second bad precedent is this. It is not important whether it is Harsha de Silva or not. There are many committees. Can the Chairman of a Committee be called over a privileges issue?

“Under the Constitution there are powers to make standing orders. It is implemented through the 1953 Privileges Act. The Chairmen have certain powers. The Chairman has acted under the limits of his powers.

Parliament Undermined

Minister Rajapakshe said while there may be errors in a report, the Parliament’s powers were diminished if privilege questions were raised against Chairmen of a committee who carried out there duties.

“There may be errors in the report. We have seen that. But I am raising a question on the constitution.

“In this way, in whatever Committee, if he did his official duties, if he is made an accused in another committee of the same parliament and there is an investigation, it is the parliament’s power that is degraded.

“So it is the confidence people have in the parliament that is reduced. There is a legal question here. The Chair should consider whether it is possible to raise a question like this

“Ultimately the final responsibility of all these Committees rests with the Speaker. It is the Speaker’s powers that are delegated to the Chairman of a Committee.

“So, this challenge is made against the Speaker. How is the Speaker doing this?

“If the next day, the COPE, or COPA issues a report, someone asks to put him in the punishment log (dandu kanda) or to do whatever and calls him to the privileges committee.

“What are you going to ask at the Privileges committee? What punishment are you going to give? (Colombo/July23/2024)

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