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Coconut association requests revision of chemical fertiliser ban

30 May 2021

By Yakuta Dawood  With the recent announcement of the Government to ban the importation and the use of chemical fertilisers, the Coconut Growers Association of Sri Lanka (CGASL) has requested the Government to make amendments to their ban proposal in order to have sustainable coconut production in the future, The Sunday Morning Business learns.  Expressing the concern in regards to the ban, CGASL President Jayantha B. Samarakoon said that the ban on chemical fertilisers will have an adverse impact on the production scale in the immediate short run, for instance, next year’s coconut production.  Explaining, he said that if the grower puts in the fertiliser today, the flowering happens on that day but the plucking of the coconut will happen only after 11 months. Hence, if the chemical fertiliser is not put on the same day, then after 11 months there would be a reduction in the coconut production, triggering the farm gate price and the consumer price to drastically increase.  Samarakoon said that they have sent a request to President Gotabaya Rajapaksa to reconsider the ban on fertiliser after referring to their proposal.  “We definitely encourage organic fertiliser. Since the Government has three years, I’ve suggested only reducing 50% of chemical fertiliser for the first year and then further reducing it to 25% of chemical fertiliser the next following year. This is because it needs to be phased out if the use of chemical fertiliser is suddenly stopped by replacing the organic fertiliser, there'll definitely be a loss of production for at least the next two years,” Samarakoon explained.  However, he noted that CGASL is waiting for a positive response despite the keen interest in the President’s goal of introducing organic production in Sri Lanka.  When inquired if the export target set for 2021 of coconut and coconut-based products is possible to be achieved due to the prevailing Covid-19 condition, Samarakoon was very optimistic about the expected result.  “The export industry, even during Covid-19 did very well last year. Last year we earned a total of $ 612 million from which $ 312 million was earned from kernel products and the remaining $ 300 million from non-kernel products. So, I do not see a problem this year and we might produce 3000 million nuts this year as planned,” he noted.  He also added that the current support by the Government is a positive impact on the industry amidst the prevailing Covid-19 due to the fact that there are no restrictions placed as of yet which enables the activities to carry on without any hindrance.  “If the current situation continues for one month or so, there could be an excess supply in the coconut products which would then eventually reduce the price levels in the market for various different reasons,” he said.  Meanwhile, commenting further, Samarakoon said that CGASL’s main focus is to increase the production capacity as much as possible by implementing a new method. In order to do that CGASL has requested the Government to give a facility subsidy scheme for irrigation.  According to him, the yield production would increase by 20% to 30% within 11 months if the irrigation of the coconut land is done, for example, if you get 3000 million nuts per year then it could be easily touched up to 3.9 million coconuts with no difficulty at all.  The Government has not yet given their positive response to the subsidiary scheme. Instead, a low-interest rate of 4% soft loan with a retainment period of five to ten years has been granted to the coconut industry. “This is reasonably good rather than waiting for a subsidiary which we might not even get due to the prevailing Covid-19 situation in the country,” he added.  Likewise, CGASL has also requested the government to look into price irregularities. Samarakoon said that the middleman who sells the coconut products benefits more than the producer and the customer.  Explaining this, he said that the cost of production for one coconut is 35 rupees. The farmers sell it for Rs. 50 by keeping Rs. 15 to themselves. However, when it reaches consumers it’s generally charged Rs. 100 per coconut in which the middleman who just does the transport and selling gets the extra Rs. 50 at the cost of the consumer.  “So we have asked the Government to address this issue as the current price does not benefit the grower nor the consumer,” he noted.  Meanwhile, speaking to The Sunday Morning Business in February, Adamjee Lukmanjee and Sons (Pvt.) Ltd., which is a prominent export firm in Sri Lanka, Managing Director Murtaza Lukmanjee said that due to a shortage in storage facilities of raw materials, the raw material prices have risen significantly, from almost 70-80%, which has adversely impacted the export industry.  “During the last four months, from October 2020, we have lost valuable foreign markets; we have lost buyers who have opted out of Sri Lankan-origin coconut products and switched to Philippines and Indonesia, as they offer cheaper alternatives,” Lukmanjee said.  Elaborating further, Lukmanjee explained that coconut, which used to be around Rs. 70-80 per kilogramme, has now gone up to Rs. 135 per kilogramme in Sri Lanka, whereas the major competitors – namely the Philippines and Indonesia – sell at Rs. 60-70 per kilogramme in their region. “Raw material is generally 75% of the total cost, so you can imagine the impact that it has had on the final product we produce for exports.”  With reference to his comment given in February, he said that based on the performance in the financial year 2020/2021, Sri Lanka will not even achieve 50% of its export target for coconut-based products, whereas last year (2019/2020), the country achieved over 100% of its target. “Either crop has to improve, or the Government has to allow raw material imports for processing, value-addition, and re-export.”  To get further comments and the current status of the situation, all attempts to contact Adamjee Lukmanjee and Sons (Pvt.) Ltd. and several other export companies proved futile.  However, when inquired about this situation from Samarakoon, he said that the Desiccated Coconut (DC) industry does face such issues in the export industry as Indonesia and the Philippines produce cheaper products than Sri Lanka.  “Sri Lanka coconut has premium pricing. We have about 55 DC factories in Sri Lanka who have undergone these problems to get their products at Rs. 50 where else they should be ideally getting it at Rs. 30 to function properly. They need to move into coconut milk, cream and powder as well as oil in order to be profitable,” he concluded.


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