Sri Lanka bans palm oil imports, tells producers to uproot plantations

A palm oil plantation is pictured next to a burnt forest near Banjarmasin in South Kalimantan province, Indonesia, September 29, 2019. REUTERS/Willy Kurniawan/File Photo

COLOMBO/MUMBAI, April 5 (Reuters) - Sri Lanka on Monday banned imports of palm oil and new palm plantations, and told producers to uproot existing plantations in a phased manner, in a surprise move that baffled the edible oil industry.

Palm oil imports and the number of plantations have been increasing in recent years in Sri Lanka, a leading producer of coconut oil.

Sri Lanka's President Gotabaya Rajapaksa said in a statement the aim was to "make the country free from oil palm plantation and palm oil consumption."

Environmentalists say palm oil production has led to widespread deforestation and damage to ecosystems.

Sri Lanka imports around 200,000 tonnes of palm oil every year, mainly from Indonesia and Malaysia, traders estimate.

"Those companies and entities which have done such (palm oil) cultivations shall be required to remove them in a phased manner with 10% uprooting at a time and replacing it with the cultivation of rubber or environmental friendly crops each year," the statement from president's office said.

Sri Lanka's palm oil industry has invested 26 billion Sri Lankan rupees ($131 million) and the country has around 11,000 hectares of palm plantations - just over 1% of the total area planted with tea, rubber and coconut, according to estimates from the country's Palm Oil Industry Association.

($1 = 199.0000 Sri Lankan rupees)

Reporting by Waruna Karunatilake in COLOMBO and Rajendra Jadhav in MUMBAI. Editing by Mark Potter

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