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Price hike in pure coconut oil unlikely 

11 May 2021

By Imsha Iqbal    Following the Consumer Affairs Authority’s (CAA) recent prohibition against blending edible coconut oil with any other oil, Government authorities have ruled out a possible price hike in pure coconut oil.  Speaking to The Morning Business, State Ministry of Coconut, Kithul, and Palmyrah Cultivation Promotion and Related Industrial Product Manufacturing and Export Diversification Co-ordinating Secretary Malraj Peiris denied the possibility of a price hike of coconut oil with the CAA ban of blending.  The Consumer Affairs Authority (CAA) prohibited blending edible coconut oil with any other oil or oils issuing an Extraordinary Gazette notification which was with effect from 7 May 2021.  This was issued under the power vested in CAA by Section 10(1)(b)(ii) of the Consumer Affairs Authority Act, No. 09 of 2003 disclosing to all importers, refiners, manufacturers, stockists, packers, distributors and traders of edible coconut oil sold in bulk or in retail in bottles or packs or containers.  Peiris noted that despite the increase of mass production of coconut and importation of coconut kernel (copra), the price of coconut will remain unchanged.  He said as a solution, the Government can impose tax for the importing coconut kernel or issue a control price for the product while the imported coconut kernel will be provided to the domestic coconut oil mills.  Further, in order to increase the mass production of coconut, the Government has already proposed to plant four million coconut trees under the instructions of the Coconut Development Authority, Coconut Research Institute and Chilaw Plantation Ltd.  He added that the allocation of lands for coconut plantation would take place under the supervision of the Land Reform Commision (LRC) of the Ministry of Lands. Further these lands would be given to private sector coconut growers under long-term capital gain tax, including the lands in the Mahaweli Zone in Polonnaruwa.  Peiris further added that anyway there is a scarcity of coconuts during the period from February to May, and that the coconut yield is low. However, importation of coconut kernel does not generally happen till the month of November or December.  Talking about the market behaviour with the discovery of carcinogenic coconut oil, Peiris assumes that even though this was discovered recently, the importation of such oil has taken place for a certain period of time and he further explained that it is not an intentional manufacture but due to coconut oil manufacture from fungal infected coconut kernel. Also, the remaining consignment of coconut oil with aflatoxin will be re-exported immediately and the importation of such oil will not occur on any grounds, he emphasised.  Around 40-50% of consumers, especially from rural or suburban areas have switched to options such as purchasing coconut oil from small scale oil mills instead of buying from the market and urban consumers have started using substitute edible oil available in the market in spite of the higher price. 


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