- Govt. waives off Special Commodity Levy for vegetable fats and margarine to allow smooth transition
- LCMA says still need to import cocoa butter fats, which cannot be replaced by coconut oil substitutes
Sri Lanka’s confectionary industry yesterday said it is actively exploring the avenues to shift towards using locally produced coconut oil substitutes and move away from palm oil fats in their production processes, as directed by the government.
However, the industry stakeholders pointed out that a complete transition is not possible and import of certain special fats would still be required to maintain the quality standards.
Speaking to Mirror Business, the Lanka Confectionery Manufacturers Association (LCMA) said that efforts have already been kicked off to develop coconut oil substitutes and by August, the industry would be able to make the transition.
The industry players have met with the Coconut Research Institute for this purpose.
“The message is that we need to shift away from using palm oil and start using locally produced coconut oil substitutes as ingredients. While we support this initiative completely, it must be understood that we will still have to import special fats for certain products to maintain the quality,” LCMA Chairman S.M.D. Suriyakumara said.
In an effort to ensure a smooth transition in making the switch, the Finance and Economic Policy Development Ministry announced on Friday (26) that the Special Commodity Levy on two products have been waived off, for a period of six months.
According to the order, the government has waived off Rs.440 per kilogramme from the applicable Special Commodity Levy on ‘vegetable fats’ and their fractions (HC Code 1516.20) and Rs.400 per kilogramme on the applicable Special Commodity Levy on ‘margarine’ (HS Code 1517.90). The order came into effect on June 27, 2020.
According to Suriyakumara, cocoa butter fats for manufacturing chocolates and cream would need to be imported, as coconut oil substitutes cannot be used for these products.
Furthermore, the local manufacturers have not been able to develop this ingredient according to the standards required by the industry either.
“This area is a question mark for us. We are unsure the direction this will go. If possible to source these special fats locally, we certainly would do so but the fact is, we cannot. We did try and the quality was not what we wanted,” added Suriyakumara.