27/08/2008 (Ceylon Daily News ) - Sri Lanka has achieved a high coconut oil production of 84,788 mt in last year recording a significant increase of 324 per cent after 22 years.

Coconut Development Authority (CDA) Chairman, D.J.U. Purasinghe told the Daily News that the coconut oil manufacturing industry which had collapsed for many years in the past has been boosted at present marking the highest growth rate. He said that the forecasted coconut oil production for this year is 45,000 mt.

The industry was in a dangerous situation for some time and coconut oil production was only 20,000 mt in 2005. But under a proper mechanism formulated by the Government, the industry is being revived.

The Government has taken a number of measures to increase the coconut oil production aiming for attracting more businessmen to the industry. "We have removed the VAT imposed on coconut oil manufacturing since 2006 in order to encourage more people to the business," he said.

There is a good demand for coconut oil in both local and international markets due to increasing prices of substituted oils. The price hike of Palm oil in the local market has also led to a surge in the demand for coconut oil.

The highest customs duty rate has also been imposed on the import of palm oil. Therefore, the local coconut oil manufacturing industry has been promoted.

With State assistance, many industrialists have entered the business. A number of factories have been set up in Kurunegala, Puttalam and Gampaha districts.

Plans have been mooted to commence small scale coconut oil manufacturing factories in the liberated Eastern Province as well.