ECONOMYNEXT – Sri Lanka’s coconut based industries say they need imported raw material to avoid losing export markets to other countries, with a 250 million nut crop shortfall projected for the first half of 2025.
By 2023 the harvest was down to 2,950 million nuts from 3,350 million nuts. Sri Lanka Coconut Research Institute is now forecasting a 1,407 million nut harvest for the first half of 2025. In Sri Lanka around 60 percent of the harvest comes in the first half of the year.
The Ceylon Chamber of Coconut Industries say based on the first half projection Sri Lanka may see another 300 million fall in coconut harvest in 2025.
There will be at least a 200 million nut shortfall in the first four months, Jayantha Samarakoon, President of the chamber said.
Export Market Loss
“We have requested the government to grant us approval to import coconuts, dried coconut chip, or kernels for the first four months, so that industries can manage orders without cancellation,” Samarakoon told reporters.
Sri Lanka has already lost the virgin coconut oil market to Vietnam and may lose the other markets also, unless imports are allowed to tide over the next few months, one exporter said.
Imports of raw material will not only help maintain export orders and prevent them from shifting to other countries, but also help moderate domestic prices, the chamber said.
Though Sri Lanka has banned imports of fresh nuts, due to fears of disease, there are well established protocols for importing coconut used in coconut producing countries including Thailand and Australia, chamber officials said.
Unlike Sri Lanka, which is wracked in import controls, Thailand is in East Asia, where export industries are based on global supply chains and free trade.
Sri Lanka exported around 782 million dollars of coconut products up to November 2024 of coir fibre pith, activated carbon, coconut milk cream, power and desiccated coconut and the full year estimate was 850 million dollars, the chamber said.
It is up from around 708 million dollars in 2023.
Fertilizer Crisis
Sri Lanka’s coconut crisis is mainly the result of not fertilizing farms over the past five years, the Chamber said.
Fertilizer prices shot up over the past few year on top of import controls.
Sri Lanka’s central bank went on an aggressive rate cutting (stimulus or accommodative monetary policy) drive from 2020 triggering forex shortages while the government at the time also banned chemical fertilizer to save foreign exchange.
The US Fed also printed money and triggered a commodity bubble further pushing up prices, especially up to 2022, but since it started to tighten policy, some easing of commodity prices is seen.
Before the stimulus crisis, a 50 kilo bag of coconut fertilizer cost only 1,500 rupees.
But now a 50 kilogram bag of coconut fertilizer costs 8,000 to 9,000 rupees compared to 1,500 rupees earlier.
At one time the cost of fertilizer was as much 12,000 rupees a bag, which made it too expensive for most coconut farmers, they said.
Related
Sri Lanka coconut auction postponed for second week due to lack of nuts
Sri Lanka to grow 40,000 acres of coconut in the North
The chamber is seeking state subsidies to give fertilizer to small farmers in particular at 4,000 rupees a bag.
Fertilizing could push yields per tree from around 56 to 86 within a year, the chamber said.
The long term solution was to expand the cultivation of coconut into new areas. (Colombo/Jan22/2025)
Continue Reading
