June 21, Colombo (LNW): Opposition parliamentarian Harsha de Silva has cautioned that plans to impose a new duty on imported coconut oil may have far-reaching consequences for Sri Lanka’s coconut-based export sector, potentially affecting foreign exchange earnings, employment and rural livelihoods.
In comments shared on social media, de Silva argued that the country’s coconut industry remains one of the most promising avenues for export-led growth, but warned that the proposed tax could create unintended disruptions across the supply chain. Industry representatives, he noted, have already expressed concern over the likely impact of the measure on manufacturers and exporters.
According to de Silva, a substantial increase in import costs could make imported coconut oil commercially unviable, prompting producers to divert locally sourced coconuts away from higher-value export industries and towards domestic oil production. He suggested that such a shift could weaken Sri Lanka’s competitiveness in international markets and place existing export agreements at risk.
The MP further claimed that the policy may ultimately fail to generate the expected government revenue, as sharply higher costs could discourage imports altogether. He warned that the resulting market distortions could place downward pressure on prices received by coconut growers while simultaneously affecting businesses that rely on a stable supply of raw materials for export-oriented production.
Raising the matter before the Committee on Public Finance (CoPF), de Silva called on policymakers to conduct a thorough assessment of the proposal before moving ahead. He stressed that taxation measures should be designed with careful consideration of their wider economic consequences, particularly for sectors that contribute significantly to export income.
He also warned that any downturn in the industry could have repercussions beyond exporters, affecting thousands of farmers, plantation workers and small-scale suppliers whose livelihoods depend on the coconut sector. With global demand for coconut-based products continuing to expand, de Silva argued that policy decisions should focus on strengthening the industry’s export potential rather than creating barriers that could undermine future growth.