Wednesday, February 5, 2025
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Coconut industrialists urge shift to processed products for export revenue growth

By: Staff Writer

February 04, Colombo (LNW): The Ceylon Chamber of Coconut Industries (CCCI) is urgently calling for government intervention to combat an alarming coconut shortage, which threatens both domestic consumption and Sri Lanka’s export-driven coconut sector.

 As a crucial part of the country’s culture and economy, coconuts play a key role in daily life while also generating vital foreign exchange revenue.

Sri Lanka typically requires 250 million coconuts per month, with 150 million consumed locally and the remaining 100 million used for exports.

 However, data from the Coconut Research Institute (CRI) reveals that coconut production has significantly declined, with a shortfall of 700 million coconuts recorded between 2021 and 2024. The situation is expected to worsen, with an additional deficit of 200 million coconuts projected between January and April 2025.

This sharp decline has driven prices up, placing financial strain on households and creating supply chain challenges for export manufacturers.The coconut sector is a major contributor to Sri Lanka’s economy, providing over 750,000 direct jobs and supporting countless others indirectly. The country earned $708 million from coconut product exports in 2023, and by November 2024, earnings had risen to $782 million, reflecting a 20% increase.

 By the end of 2024, total export revenue is expected to reach $850 million, the highest on record. Despite this success, the industry’s long-term stability is in jeopardy without immediate action.

According to Jayantha Samarakoon, President of the CCCI, the coconut shortage presents a dual crisis, affecting both households and exporters. He warns that without urgent intervention, Sri Lanka risks losing its competitive edge in global markets while also making coconuts unaffordable for local consumers.

The industry faces multiple challenges, including a lack of fertilizer due to high costs, inadequate irrigation, climate change impacts, pest attacks, and land fragmentation.Rising coconut prices have made this essential staple increasingly inaccessible, posing a risk of nutritional deficiencies among Sri Lankans.

Exporters are also struggling to fulfill international orders, which could damage Sri Lanka’s reputation as a reliable supplier.

To address the crisis, the CCCI has proposed several key measures. It recommends allocating LKR 1.5 billion from the CESS Fund to support farmers with subsidies for fertilizer, pest control, and replanting.

Soft loans should also be made available to enhance agricultural infrastructure, including water management and solar power adoption. Additionally, the CCCI urges consumers to reduce coconut waste and shift towards processed products such as coconut milk powder and desiccated coconut.

To stabilize the industry, the CCCI suggests temporarily permitting the import of 200 million coconuts or equivalent raw materials, such as copra chips and frozen kernels, to support local manufacturing. Establishing stringent quality standards for imported materials is also necessary to maintain product consistency for both domestic and export markets.

With global demand for coconut-based products reaching $30 billion annually, Sri Lanka has immense potential to expand its market share. The CCCI has set an ambitious goal of increasing export revenue to $1.5 billion by 2027, requiring an annual production of 4.5 billion coconuts.

Industry leaders, including Randeewa Malalasooriya of the Coconut Milk Manufacturers’ Association, believe this target is achievable through improved farming practices, reduced waste, and strategic imports of raw materials for value addition and re-export.

To sustain growth, Sri Lanka must enhance productivity and adopt innovative solutions. Industry stakeholders emphasize the need for a shift towards processed coconut products to curb wastage and ensure a stable supply. 

With the right policies in place, Sri Lanka has the potential to elevate its coconut industry, securing its place as a global leader while ensuring affordability for local consumers.

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