Sri Lanka’s coconut industry, a key pillar of its agricultural economy, is facing renewed challenges as prices fell at the latest weekly auction, despite a modest recovery in production earlier this year. According to Coconut Development Authority (CDA) data, the average price for 1,000 coconuts dropped by 5.4 percent to 133,623 rupees at the August 16 auction.
Auction volumes also reflected uncertainty in the market. The number of coconuts offered fell to 658,480 from 751,836 a week earlier, while sales rose slightly to 582,000 nuts compared to 523,823 previously.
On the ground, wholesale prices ranged between 170–180 rupees for a large nut and 140–160 rupees for smaller ones, while farmgate prices in Kurunegala — Sri Lanka’s main coconut belt — stood at 120–155 rupees per nut.
Meanwhile, copra traded at 120,000–125,000 rupees per 250 kg, and local coconut oil prices ranged from 880,000 to 900,000 rupees per metric ton.
Central Bank figures show coconut production had risen 18.3 percent year-on-year in June 2025, with output climbing from 170 million nuts in January to 289.5 million by mid-year.
This recovery followed drought-hit declines in late 2024, when adverse weather and irregular rainfall severely impacted cultivation. However, growers and exporters warn that the improvement is fragile.
Exports of coconut-based products such as desiccated coconut, virgin coconut oil, coir, and activated carbon continue to contribute significantly to foreign exchange earnings, but shipments have slowed this year.
Provisional data shows that in the first seven months of 2025, coconut product exports brought in around USD 450 million — a decline compared to USD 510 million during the same period in 2024.
Industry analysts attribute the slowdown to inconsistent production, volatile global demand, and competition from the Philippines and Indonesia, the world’s two largest coconut producers.
The structural problems in Sri Lanka’s coconut sector go beyond temporary price fluctuations. Smallholder farmers, who account for nearly 80 percent of coconut cultivation, struggle with rising input costs, aging trees, land fragmentation, and a lack of access to modern technology.
Erratic weather patterns linked to climate change have also worsened yields in traditional growing regions such as Kurunegala, Puttalam, Gampaha, and parts of the Southern Province.
Industry stakeholders argue that the absence of a coherent government policy has left the sector vulnerable. Although successive governments have promised replanting programs, irrigation schemes, and research investments, progress has been slow.
Experts stress the need for an integrated national coconut policy focusing on replanting with high-yielding varieties, promoting value-added exports, expanding irrigation facilities, and ensuring price stabilization for farmers.
Without a strategic approach, Sri Lanka risks losing its competitive edge in global markets. As one industry representative put it, “We have the potential to double coconut export earnings within five years, but only if policymakers treat this industry as a national priority.”
