Sri Lanka’s cabinet has mandated that state agencies, including the military, police, hospitals, and prisons, purchase brown sugar from Lanka Sugar Limited to help boost sales of the state-run company’s products, according to spokesman Nalinda Jayatissa, reported Sri Lanka based Economy Next portal.
Lanka Sugar’s operations include sugar factories at Sevenagala and Pelwatte, which were expropriated from private investors, including stock market stakeholders, by the previous Rajapaksa administration.
The company has struggled with unsold brown sugar due to high production costs compared to Brazil, as well as the impact of value-added tax (VAT). In contrast, white sugar is exempt from VAT but is subject to a special commodity levy.
This year, Lanka Sugar is expected to produce 56,000 metric tonnes of brown sugar. The cabinet recently approved a proposal from the Ministry of Industries to make the purchase of brown sugar mandatory for state agencies.
