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Lanka’s coconut industry faces major setback as US slaps 30% tariff

Published

5 months ago

2025/07/20

The Ceylon Chamber of Coconut Industry (CCCI) has issued an urgent appeal to the government in response to the United States’ decision to impose a 30% tariff on coconut-based products from Sri Lanka, effective August 1, 2025.

“The move threatens to upend one of the country’s most valuable export sectors, which currently generates over USD 857 million in annual revenue, and risks pushing thousands of rural livelihoods into uncertainty,” a CCCI has said in a media statement.

The United States is Sri Lanka’s single largest buyer of coconut-based products, accounting for more than 20% of the sector’s exports, valued at roughly USD 160 million each year. According to the CCCI, the new tariff all but destroys Sri Lanka’s price competitiveness in the US market. Competing suppliers such as the Philippines, Vietnam, and India enjoy preferential trade access, meaning Sri Lankan products, despite their globally renowned quality, will be sidelined on cost alone.

“This isn’t just a policy shift. It’s a devastating blow to an entire industry that Sri Lanka has worked hard to build,” said Jayantha Samarakoon, Chairman of the CCCI. “Our products are recognized globally for their purity, taste, and nutritional value. But no matter how good they are, a 30% tariff makes them unaffordable for buyers. We will be priced out of the market, not because of quality, but because of cost. While we acknowledge the reduction from the originally proposed 44%, even at 30%, the impact remains deeply damaging to our export competitiveness and to the hundreds of thousands of rural livelihoods tied to this industry.”

The export basket at risk includes a wide range of value-added goods: desiccated coconut, virgin and refined coconut oil, coconut milk and cream, coconut water, coir fibre products, activated carbon, and husk-based growing media. Many of these are premium niche exports that Sri Lanka pioneered in the global market, but buyers will now have little choice but to shift sourcing to cheaper destinations.

The impact, however, goes far beyond trade statistics. Over 800,000 Sri Lankans depend on the coconut industry for their livelihoods, including smallholder farmers, processors, factory workers, logistics providers, and exporters. More than 150,000 direct jobs in the manufacturing and processing sectors are now under immediate threat. A sudden drop in export demand could flood the domestic market with unsold produce, pushing down farm gate prices and cutting off income streams for rural families already grappling with inflation and rising production costs.

The CCCI also warns of broader economic fallout. A downturn in coconut exports could trigger a collapse in investor confidence and foreign direct investment, particularly as Sri Lanka works to position itself as a reliable, competitive sourcing destination under its ongoing IMF reform program. With other coconut-producing countries offering stronger policy support and lower-cost structures, there is a real risk of local industrialists shifting operations abroad — taking jobs, capital, and long-term opportunity with them.

In light of this, the Chamber is calling for urgent and coordinated government action to safeguard the sector. It has urged immediate engagement with the Office of the US Trade Representative to explore options for tariff relief or exemptions. The Chamber also called for a renewed push to secure bilateral trade agreements that ensure fair access to key markets, alongside targeted support to help exporters absorb short-term shocks and improve long-term competitiveness.

“This is no longer just an economic issue. It’s a national priority,” Samarakoon stressed. “If we allow this industry to fall through the cracks, we risk losing not only a major export earner, but a vital pillar of rural resilience, food security, and industrial growth. The time to act is now.”

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Rs 1. 3 bn yahapalana building deal under investigation

Published

12 hours ago

2025/12/12

Thilina Walpola

Jayasinghe building

Several ex-Cabinet ministers questioned; Ranil, Sajith, too likely to be summoned

The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has initiated an inquiry into the shifting of the Agriculture Ministry situated at Rajamalwatte, to a building belonging to the D. P. Jayasinghe Group of Companies, at Rajagiriya, during the Yahapalana government.

The building was rented for a five-year period at a cost of over Rs 1 bn by the yahapalana government within months after the then President Maithripala Sirisena declared opened the 10-storey building complex.

The CIABOC yesterday morning recorded former yahapalana minister Gayantha Karunatilleke’s statement in connection with the investigation. Later in the day, CIABOC recorded the statement of SJB General Secretary Ranjith Maddumabanadara. Earlier CIABOC summoned former ministers Thalatha Atukorale, Wajira Abeywardena and Lakshman Kiriella. At the time of the finalisation of the deal, KIriella was in the UNP.

Sources said that former PM and President Ranil Wickremesinghe, too, was likely to be questioned in this regard. Responding to The Island queries, sources pointed out even SJB leader Sajith Premadasa was expected to be questioned.

The then Speaker Karu Jayasuriya is on record as having said that the building was rented in keeping with a decision taken by the government and not Parliament.

The UNP-SLFP coalition shifted the Agriculture Ministry to accommodate 16 Sectoral Oversight Committees therein.

Although the government paid as much as Rs. 21.5 mn monthly rent to D.P.A. Jayasinghe Company, the Agriculture Ministry failed to move in for over a year. The then Agriculture Minister Duminda Dissanayake sought Cabinet approval on Dec 1, 2015 to rent the building.

According to inquiries conducted earlier by the Presidential Commission appointed to probe state sector corruption, the Agriculture Ministry sought Cabinet approval for a new building after the then Prime Minister Wickremesinghe submitted a cabinet proposal on 21 September, 2015, to use the Agriculture Ministry building for Parliament’s sectoral oversight committees.

PM Wickremesinghe’s Secretary Saman Ekanayake has told the Commission that public funds could have been saved if the several vacant floors of Suhurupaya belonging to the Defence Ministry had been made available to the Agriculture Ministry.

By Shamindra Ferdinando ✍️

News

SL Railways suffers staggering losses; more than 2/3 of rail tracks out of service

Published

12 hours ago

2025/12/12

Thilina Walpola

Army personnel engaged in repairing damaged railway tracks in the Boo Oya area. Cyclone Ditwah caused extensive damage to railway tracks in several parts of the country (pic courtesy Army)

Railway sources said that the damages caused to railway tracks could be more than USD 300 mn.

According to UNDP Rapid Crisis Assessment Sri Lanka’s railroad system, over 278 km of railways were exposed to cyclone-related flooding, including 35 railroad bridges nationwide. This figure reflects flooding only, but other hazards (such as localised debris, landslides, or damage to a single bridge) can also disrupt operations, meaning that even relatively small obstructions can render long stretches of railway non-operational. Like road exposure, railway exposure limits mobility and the capacity of affected populations to access key services and infrastructure.

At the level of divisional secretariats, Colombo and Thimbirigasyaya in Colombo District, Ja Ela in Gampaha District, as well as Mannar Town and Nanaddan in Mannar District all registered over 10 km of exposed railways each.

Commissioner-General of Essential Services B.K. Prabath Chandrakeerthi is on record as having said that only 478 kilometers of Sri Lanka’s 1,593-km railway network were currently usable following extensive damage caused by the recent cyclone.

News

US, SL advancing free, open, and resilient Indo-Pacific region: Embassy

Published

12 hours ago

2025/12/12

Thilina Walpola

Allison Hooker

Under Secretary of State for Political Affairs Allison Hooker arrived in Colombo yesterday (11) to underscore US interest in defence, trade and maritime security in line with their Indo-Pacific strategy.

The US embassy here issued the following statement: “Under Secretary Hooker will meet with Sri Lankan counterparts to discuss a wide range of bilateral issues, focused on deepening economic and commercial ties, strengthening defence cooperation, and supporting Sri Lanka’s economic and maritime sovereignty.

The United States and Sri Lanka share a strong and enduring partnership rooted in our mutual commitment to regional security, economic growth, and prosperity for our peoples. Through close cooperation on defence, trade, and maritime security, we are working together to advance a free, open, and resilient Indo-Pacific region.

As we continue to build on our strategic partnership, the United States also stands with the people of Sri Lanka as they respond to the devastating impacts of Cyclone Ditwah. We remain committed to working together to address both immediate challenges and long-term opportunities for our two nations, reflecting our ongoing commitment to the U.S.-Sri Lanka partnership.”