Unprecedented coconut shortage threatening Sri Lanka

An unprecedented coconut shortage is threatening both domestic consumption and Sri Lanka?s export-driven coconut industry, the?Ceylon Chamber of Coconut Industries (CCCI) said.

As a cultural and economic cornerstone, coconuts are vital for household sustenance and are a significant source of foreign exchange for the country.

The country?s average monthly requirement is 250 million coconuts, out of which 150 million is consumed consumed domestically while the balance 100 million is used for the export industry.

Based on data presented by the Coconut Research Institute (CRI) Sri Lanka experienced a yield reduction of over 700 million coconuts from 2021 to 2024.? A further production shortfall of approximately 200 million coconuts is predicted from January to April 2025. This shortage has already led to skyrocketing prices, straining household budgets, and disrupting raw material supplies for export manufacturers. In 2023, coconut products exports generated $708 million, and by November 2024, the country had earned $782 million, reflecting a 20% increase compared to the corresponding period last year. The annual figure is estimated to close at $850 million, marking the highest-ever income with a 17% year-on-year growth. This underscores the critical need to stabilize the sector to protect its revenue potential and the livelihoods it supports.

Annual National Crop Production (ANCP)

The coconut industry provides over 750,000 direct employment opportunities in the formal sector and supports hundreds of thousands more indirectly, making it a lifeline of Sri Lanka?s economy.

?The current coconut shortage poses a dual crisis for households and exporters,? said Jayantha Samarakoon, President of the CCCI. ?Without immediate and decisive action, Sri Lanka risks undermining its competitive edge in global markets, jeopardizing thousands of livelihoods, and threatening the affordability of the nation?s staple food, the ?Devani Batha.??

Key Challenges Highlighted by the CCCI:

• Impact to Cultivation:
  • Non application of fertilizer due to high cost and inadequate? irrigation practices.
  • Spread of diseases and vulnerabilities to climate change.
  • Pest and animal attacks.
  • Land fragmentation.
• Escalating Prices: The reduced supply has driven up coconut prices, making this essential staple inaccessible to many households and risking nutritional deficiencies.
• Export Disruptions: Exporters face critical supply chain challenges, threatening their ability to meet international orders and tarnishing Sri Lanka?s reputation as a reliable exporter.

CCCI?s Recommendations to Mitigate the Crisis:

1. Farmer Support:
   Allocate LKR 1.5 billion from the CESS Fund to provide subsidies for moisture conservation, fertilizers, pest control, replanting, and other agricultural improvements. Additionally, offer soft loans to enhance infrastructure, including water management, fertigation, and solar power, to boost productivity.
2. Consumer Awareness and Alternatives:
   Promote processed coconut products, coconut milk powder/liquid and desiccated coconut, especially in urban areas, to reduce the demand for fresh coconuts.
3. Appeal to Consumers:
   Encourage households to minimize coconut waste by shifting to processed products certified by the Sri Lanka Standards Institution (SLSI) and the Coconut Development Authority (CDA). Studies show that 20?25% of domestically consumed coconuts are wasted. A 10% reduction in domestic consumption could release 200 million coconuts to the industry, generating over USD 160 million in foreign exchange annually.
4. Short-Term Measures:
   Permit the importation of 200 million nuts or equivalent raw materials, such as copra chips, dried pairings, coconut milk, and frozen kernels, to stabilize the supply chain. Importing fresh coconuts, particularly for the oil and activated carbon industries, offers a cost-effective solution. This can be done under protocols established in accordance with International Plant Protection Convention (IPPC) guidelines with the intervention of the CRI and National Plant Quarantine Service of Department of Agriculture.
5. Quality Standards:
   Develop practical SLSI guidelines for imported raw materials that align with global standards to ensure quality and availability for both domestic and export markets.

With global demand for coconut-based products estimated at $27?30 billion annually?fueled by the rise in vegan and plant-based diets?Sri Lanka has immense potential to expand its market share. Coconut husk-based fiber and substrates, which account for 30% of the nation?s coconut export earnings, are in high demand due to the global shift toward controlled environmental agriculture. Similarly, activated carbon, the third-largest contributor to the sector, presents endless opportunities for growth.

The CCCI is committed to helping Sri Lanka achieve $1.5 billion in export revenue by 2027 for which 4.5 billion coconuts per annum is required. Achieving this goal, however, depends on stabilizing the local coconut supply, supporting farmers, and fostering innovation in coconut-related industries while ensuring sufficient supply for domestic consumption.

?The time for action is now,? added the CCCI spokesperson. ?Through collaborative and immediate measures, Sri Lanka can not only recover but also position itself as a global leader in the coconut industry. This approach is critical for restoring balance, enhancing export competitiveness, and ensuring affordable access for all Sri Lankans.? (Colombo Gazette)