PALMOILMAGAZINE, KUALA LUMPUR – Sri Lanka is steadily moving along a path of economic recovery, with growth prospects becoming increasingly solid. The South Asian country’s gross domestic product (GDP) is projected to expand by 3.3% in 2025 and is expected to exceed 4% in 2026, supported by a rebound in tourism, stronger domestic consumption, and improving export competitiveness.
As reported by Palmoilmagazine.com, citing an analysis by Roshan Martin of the Malaysian Palm Oil Council (MPOC) on Sunday (4 January 2026), this economic momentum is also accelerating the transformation of Sri Lanka’s food sector. Urbanisation, shifting consumption patterns, and the rapid expansion of the hotel, restaurant, and catering (HORECA) industry are creating new demand for reliable and efficient food ingredients, particularly vegetable oils and fats.
Sri Lanka’s annual consumption of edible oils and fats currently ranges between 230,000 and 250,000 tons. However, domestic production only supplies around 65,000 to 70,000 tons, leaving a substantial supply gap that must be met through imports. Within this structure, palm oil has assumed a strategic role as a key source of supply after coconut oil.
Also Read: KPBN Inacom CPO Prices Edge Higher on Friday (9/1), Malaysian Palm Oil Futures Slip on Profit-Taking
Against this backdrop, Malaysian palm oil has firmly established itself as a preferred option for Sri Lanka’s food industry. Beyond ensuring continuity of supply, Malaysian palm oil offers opportunities for product diversification through specialty fats, functional ingredients, and other value-added palm-based solutions. Over the past five years, Malaysia has consistently remained Sri Lanka’s largest supplier, reinforcing its position as a major trading partner in the palm oil sector.
Convenience Food and Delivery Services Market Expands Rapidly
Prospects for Sri Lanka’s food sector continue to brighten alongside the rapid growth of the convenience food and food delivery markets. Data from Statista shows that Sri Lanka’s convenience food market is projected to generate approximately US$2.64 billion in revenue in 2025, with an average annual growth rate of 7.91% through 2029. This expansion is being driven by rising demand among urban consumers for quick yet nutritious food options.
ALso Read: Palm-Based Candles Gain Global Traction as Malaysia Expands High-Value Downstream Strategy
At the same time, the online food delivery market is forecast to reach €968.10 million in 2025, supported by a compound annual growth rate (CAGR) of 16.05% between 2025 and 2028. This wave of digitalisation signals a structural shift in consumer behaviour and further strengthens the outlook for Sri Lanka’s food service industry.
Palm Oil Demand Continues to Strengthen
Although relatively small in volume, Sri Lanka is widely regarded as a stable and consistent palm oil market, with annual imports typically ranging from 80,000 to 100,000 tons. Refined, bleached, and deodorised (RBD) palm olein remains the backbone of the HORECA sector, particularly for frying applications. Meanwhile, interest in specialty fats for the bakery industry and non-dairy products is also beginning to grow, opening wider opportunities for palm oil suppliers from both Indonesia and Malaysia. (P2)
