InfoSAWIT, KUALA LUMPUR — Sri Lanka is gradually returning to a path of economic recovery, with increasingly solid growth prospects. The South Asian country’s gross domestic product (GDP) is projected to grow by 3.3 percent in 2025 and is expected to exceed 4 percent in 2026, supported by a rebound in tourism, stronger domestic consumption, and improved export competitiveness.
According to InfoSAWIT, quote an article by Roshan Martin of the Malaysian Palm Oil Council (MPOC) published on Sunday (January 4, 2026), the economic recovery is driving transformation in Sri Lanka’s food sector. Urbanization, changing consumption patterns, and growth in the hotel, restaurant, and catering (HORECA) sector are generating new demand for reliable and efficient food ingredients, particularly edible oils and fats.
Sri Lanka’s consumption of edible oils and fats currently ranges between 230,000 and 250,000 tonnes per year. However, domestic production only supplies around 65,000 to 70,000 tonnes, leaving a substantial supply deficit that must be met through imports. Within this structure, palm oil holds a strategic position as a primary supply source after coconut oil.
Amid these conditions, Malaysian palm oil has established itself as the preferred choice for Sri Lanka’s food industry. Beyond supply reliability, Malaysian palm oil offers opportunities for product diversification through specialty fats, functional ingredients, and value-added palm-based solutions. Over the past five years, Malaysia has consistently been Sri Lanka’s largest supplier, reinforcing its role as a key trading partner in the palm oil sector.
Convenience Food and Delivery Services Drive Growth
Sri Lanka’s food sector outlook continues to brighten alongside the rapid expansion of convenience food and food delivery services. Data from Statista shows that the country’s convenience food market is projected to generate revenues of approximately US$2.64 billion in 2025, with an average annual growth rate of 7.91 percent through 2029. This growth is driven by urban consumers’ demand for fast yet nutritious food options.
At the same time, the online food delivery market is expected to reach €968.10 million in 2025, with a compound annual growth rate (CAGR) of 16.05 percent between 2025 and 2028. This digital shift signals a structural change in consumer behavior and further strengthens the outlook for the foodservice industry.
Palm Oil Demand Continues to Rise
Although relatively small in volume, Sri Lanka is known as a stable and consistent palm oil market, with annual imports ranging from 80,000 to 100,000 tonnes. Refined, bleached, and deodorised (RBD) palm olein remains the backbone of the HORECA sector, particularly for frying applications.
Meanwhile, demand for specialty fats used in bakery products and non-dairy applications is beginning to grow, opening new diversification opportunities for palm oil suppliers from both Indonesia and Malaysia. (T2)
