By: Staff Writer
March 18, Colombo (LNW): Sri Lanka’s agricultural industry is currently grappling with a substantial decline in production, particularly affecting staple crops like paddy, tea, and coconut. This downturn is compounded by the impact of global agricultural supply chain disruptions, worsened by extreme weather conditions.
The ripple effects of these challenges are pushing food prices higher across the island, intensifying inflationary pressures that are becoming a significant concern for both the public and policymakers alike.
In Sri Lanka, the country’s key crop, paddy, has faced a marked reduction in output. By the end of December 2024, the forecast for the 2024/25 Maha season predicted a decrease in production to 2.57 million metric tonnes, reflecting a 5.77 percent dip compared to the previous season, according to data from the Central Bank.
This reduction in paddy production has contributed to a sharp rise in rice prices, with retail outlets facing significant shortages. Some rice varieties have been out of stock for extended periods, with some stores experiencing shortages lasting weeks or even months.
Despite government efforts to manage the situation through rice imports, setting minimum paddy prices, and imposing maximum rice prices, the market remains volatile and unstable.
Tea, another key agricultural export of Sri Lanka, has had mixed fortunes. Although tea production experienced notable growth in December 2024 (9.6 percent) and January 2025 (14.6 percent), it suffered a dramatic 22 percent decline in February 2025, amounting to just 15.59 million kilograms.
As a result, the cumulative production for the first two months of 2025 showed a slight decrease. At the same time, tea auction prices have been trending downward, reflecting the overall struggles of the sector.
Coconut production has also been severely impacted, experiencing declines of 33.1 percent in December 2024 and 32.2 percent in January 2025. This sharp reduction in supply has led to a surge in coconut prices, with consumers now paying nearly Rs.200 per nut. This situation is putting additional strain on household budgets, further exacerbating the overall inflationary pressures.
However, there is a bright spot in Sri Lanka’s rubber production, which grew by 32.4 percent in December 2024. Despite this positive development, provisional data indicates a potential decline in rubber output in January 2025.
Globally, the situation is equally concerning, as both coffee and cocoa prices have risen significantly due to adverse weather conditions. In 2024, global coffee prices surged by 40 percent, reaching multi-year highs.
Similarly, cocoa prices hit an all-time high in December 2024, climbing by 30 percent, driven by poor weather conditions in West Africa, particularly in Côte d’Ivoire and Ghana, which together supply 60 percent of the world’s cocoa.
The combined effects of local agricultural challenges and global supply chain disruptions are creating a challenging landscape for Sri Lanka’s agricultural sector and consumers alike.
