The country’s confectionery industry including bakeries is up in arms over the recent increase in the import taxes on Palm Oil, a key ingredient for their products.
Lanka Confectionery Manufacturers Association (LCMA) Chairman S.M.D. Suriyakumara said the taxes on Palm Oil was increased by Rs. 100 per kilo, and since there aren’t any local substitutes that can meet the demand for this product, the Confectionery industry will lose of Rs. 100 million per month.
He said given the current economic environment such a loss will have a very negative impact on the operations of all confectionery manufacturers.
Suriyakumara said that coconut oil cannot be used as an alternative, hence manufacturers will be compelled to import Palm Oil at the increased prices.
Since Palm Oil is an essential fat required by the confectioners and bakers, the additional cost will cause significant stress and impose additional burdens to both the manufactures and the consumers of these products.
Given the serious impact, the LCMA has requested that the Government to reconsider the tax increase of Palm Oil, and expressed hope that the Government will be mindful of the impact that the hike will cause to the end consumer especially given the COVID-19 crisis and resultant economic downturn. It said if this special commodity levy is not removed it will be very difficult for manufactures to maintain current prices.
Suriyakumara said the confectionery industry was unique in that despite the constant threat of foreign competition, it has retained 100% Sri Lankan ownership and has provided the local consumers with products that are even better than imports or those available in foreign countries.
The industry consists of companies producing Biscuits, Cookies, Cakes, Wafers, Toffees, Chocolates, Desserts, Snacks, Ice Cream etc. This industry which was built on over many decades of hard work and contributes around over 85,000 tons per annum to the national food supply chain.
The contribution to annual taxes are immense and these confectionery companies have been exporting to over 40 countries with an annual export income of $ 100 million. The industry employs over 50,000 people directly and over 500,000 people indirectly through national supply chain network involving over 150,000 retailers across the country.
(FT)