The final decision on importing coconuts to meet the demand of factories producing coconut-based products is expected by the first week of February, Deputy Minister of Food Security R.M. Jayawardana said yesterday (25).
This comes as coconut prices have surged significantly, with average retail prices in key markets like Pettah and Narahenpita rising by 66.7%, from Rs. 120 in January 2024 to Rs. 200 this month.
Wholesale prices have increased even more sharply, up 111.1% in Pettah, from Rs. 90 in 2024 to Rs. 190 in 2025.
The Central Bank of Sri Lanka (CBSL) attributed the price spike on 23 January to limited supply from major coconut cultivation regions.
Jayawardana noted that Cabinet discussions were ongoing and a final decision, including on the quantity of coconuts to be imported, was expected by the first week of February.
He also clarified that coconuts from State-owned plantations were reserved for consumer use and would be distributed through Sathosa, the State-run retail network.
Furthermore, decisions regarding fertiliser subsidies or providing fertiliser at reduced costs are to be finalised by February to address production challenges.
Coconut production in Sri Lanka has been steadily declining. By December 2024, the Agriculture Data Bulletin reported a 24% drop in production for October, with only 2,452 million nuts harvested compared to previous years. The total harvest for 2023 fell to 2,950 million nuts, down from 3,350 million in earlier years.
The Coconut Research Institute has projected a further decline, forecasting a harvest of 1,407 million nuts for the first half of 2025, with a potential 300 million nut shortfall expected.
Industry experts such as the Ceylon Chamber of Coconut Industries (CCCI) point to the long-term effects of inadequate fertilisation over the past five years, driven by the sharp increase in fertiliser prices following import controls.
The CCCI highlighted that the price of a 50 kg bag of coconut fertiliser had soared from Rs. 1,500 to Rs. 8,000-9,000 in recent years, peaking at Rs. 12,000 at one time, which made it unaffordable for many farmers.
The fertiliser ban imposed during the forex crisis and the CBSL’s monetary policies exacerbated the situation, further disrupting the supply chain.
Sri Lanka’s coconut-based exports, valued at $ 850 million in 2024, face the risk of losing market share to competitors like Vietnam. The export sector has already lost ground in the virgin coconut oil market and may face further losses unless measures are taken.
The chamber noted that importing raw materials could not only stabilise domestic prices but also prevent export orders from shifting to other countries.
In 2024, Sri Lanka exported $ 782 million worth of coconut products – including coir fibre, activated carbon, and desiccated coconut – up from $ 708 million in 2023. However, the shortfall in domestic production threatens to derail this growth.