In Sri Lanka, the coconut sector is experiencing a downturn, with annual production dropping from three billion to 2.85 billion nuts. This decline has been attributed to erratic fertilizer policies by past administrations, as stated by Coconut Development Authority (CDA) chairman, Shantha Ranathunga. In discussions with The Island Financial Review, Ranathunga pointed out that fluctuations in foreign exchange rates have led to a neglect of proper tree care by farmers, further aggravating the situation.
Moreover, the industry is battling diseases and pest infestations, with insufficient oversight being a contributing factor. Despite these challenges, Sri Lankan exporters are finding opportunities in the global market due to supply shortages in the Philippines and Indonesia, allowing for better pricing of their products.
In light of increased global demand, the government is initiating measures to support local exporters by facilitating coconut kernel imports, following requests from companies like Nestle and CBL. A Cabinet paper is in the works to allow exporters to import unlimited quantities of coconut kernel, aiming to alleviate supply constraints.
Concerns about a "coconut mafia" influencing local prices have been raised, with retail prices reaching Rs. 150-160 (USD 0.41-0.44) compared to estate purchase prices of Rs. 90-100 (USD 0.25-0.27). The CDA is responding by setting minimum auction prices and providing financial subsidies to farmers for fertilizer purchases to enhance production.
With local coconut and oil prices surging and global edible oil prices on the rise, the urgency to stabilize the domestic market is paramount. The CDA is actively working to address these issues through various initiatives.
Source: The Island Online