News

Slump in imports trigger surge in coconut oil prices

Published

5 years ago

2021/05/9

By Suresh Perera

With the drastic drop in imports, coconut oil prices in the market have surged to a new high as local production is grossly insufficient to meet the annual consumption of around 200,000 metric tons, industry officials said.

In 2020, local coconut oil production was a negligible 20,000MT, which translated into a yawning gap that had to be bridged by importing 180,000MT, they said.

“This has been the position over the past few years as dominant imports dwarfed local supplies”, they pointed out.

The ban on the import of palm oil has also compounded the issue as customers will now have to depend wholly on coconut oil resulting in inevitable pressure on the demand curve, they pointed out.

Prices have soared with a 750ml bottle of coconut oil fetching Rs. 550-600 in the local market, they said, while predicting the upward trend to continue due to short supply.

The local production of coconut oil fell by the wayside as high prices of nuts was a challenge to compete with imports, says M. L. D. Niroshana, Director-General of the Coconut Development Authority.

On an average price of Rs. 85 each, it requires nine to ten nuts to extract a litre of coconut oil, and they need to sell a 750ml bottle for around Rs. 500 to make a small profit. However, this was not feasible when imports were available at a more competitive price, he noted.

Earlier, a 750ml bottle of coconut oil was selling at anything between Rs. 320-380. With the slump in imports following the aflatoxins controversy, prices have zoomed as supply can no longer meet the demand, market sources said.

Consignments of palm oil imported before the ban was announced are still available in the marketplace, but after existing stocks are lapped up, there will be more pressure exerted on the demand for coconut oil that’s bound to see prices going through the roof, they warned.

“Market forces are at play because there existed a big gap between imports and local production of coconut oil. With many importers now reluctant to order fresh stocks due to uncertainty over contamination fears, and coupled with the ban on palm oil, the market is grappling with the demand for this essential consumer commodity”, Niroshana outlined.

Sri Lanka’s production in 2020 was 2,760 million nuts, which fell short of the 3,000 million target. The figure was envisaged to reach 3,600 million at peak. During October, November, December and January, there’s a shortage of nuts, but production picks up with an increase in yield during May-August.

“There is neither a short-term solution nor a question of expediting the production process as it takes 10 years for coconut trees to yield. The government grants a subsidy for fertilizer and water to growers in a bid to push up production”, Niroshana elaborated.

As in any business, private millers are also driven by profits. In the short-term, the price of nuts cannot be expected to dip to Rs. 35-45 each for millers to make a margin by selling coconut oil, the Director-General said.

As long as nut prices remain high, local coconut oil will also be costly as they go hand in hand, he pointed out. “More millers will be encouraged to take to extracting coconut oil if imports are limited and market conditions and prices are good”.

On the other hand, the export of copra is more lucrative as prices are attractive in foreign markets. This segment earned an export income of US$ 661 million in 2020, Niroshana further said.

In a bid to mitigate the ballooning prices in the market, the government has permitted only the state-owned BCC Lanka to import desiccated coconut up to a maximum of 13,000MT per month under a Special Commodity Levy (SCL) of one rupee per kilo, industry officials said.

On the recommendation of the Industries Ministry, the consignments will be allowed for a period of three months with effect from April 28, 2021, they said.

The stocks are likely to be imported from Indonesia instead of India because of the raging coronavirus pandemic there, they noted.

According to a Finance Ministry directive, a SCL of Rs. 300 per kilo will be imposed on importers of desiccated coconut.

Retail coconut prices still remain relatively high with each fetching anything between Rs. 85-100 depending on the size, market sources said.

A coconut grower in Nattandiya said the average farmgate price for nuts has now dropped to Rs. 50-55 each. In the case of small nuts, two are sold for the price of an average nut.

He said the average farmgate price was Rs. 75 each about one and a half months ago when retail market prices shot up to Rs. 100-125 per nut.

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News

Implementation of water supply projects in small town and rural areas.

Published

7 hours ago

2026/06/3

Priyan

Access to safe drinking water for populations residing in small towns and rural areas of Sri Lanka has not yet been fully ensured, and this continues to pose a major challenge to the country’s social and economic development.

With a view to overcome this situation, a programme has been planned to provide clean drinking water to approximately 600,000 families living in semi-urban and rural areas through the implementation of 300 projects covering 50 small towns and rural areas.

The projects are aimed at establishing safe, reliable and sustainable drinking water supply systems, with water to be treated through modern purification technologies, including chlorination and filtration systems, in conformity with national and international drinking water standards.

Accordingly, having considered the resolution furnished by the Minister of Housing, Construction and Water Supply, the Cabinet of Ministers granted approval for the implementation of the proposed programme by the National Water Supply and Drainage Board and the National Community Water Supply Department during the period 2027–2029, subject to the conduct of a feasibility study on the proposed programme and inclusion in the Public Investment Programme based on its outcome.

News

Cabinet nod to submit Import and Export (Control) Regulations No. 04 of 2026 to Parliament for its concurrence

Published

7 hours ago

2026/06/3

Priyan

Hydrochlorofluorocarbons (HCFCs), which are chemical compounds widely used in refrigerators and air conditioning units, are being globally phased out under the Montreal Protocol due to their high potential for ozone layer depletion and global warming.

Sri Lanka has likewise committed to phasing out these chemical substances by the year 2030 in a stepwise manner. Accordingly,
regulations under the Import and Export (Control) Act, No. 1 of 1969, namely the Import and Export (Control) Regulations No. 04 of 2026, published in Extraordinary Gazette Notification No. 2487/29 dated 2026-05-07, have been issued, prohibiting, with effect from 2026-06-06, the importation of equipment and appliances that operate solely on hydrochlorofluorocarbons, and prohibiting, with effect from 2028-01-01, the importation of compressors used as components in refrigeration systems of equipment and appliances that operate solely on hydrochlorofluorocarbons.

Accordingly, the Cabinet of Ministers has approved the resolution furnished by the President in his capacity as
the Minister of Finance, Planning and Economic Development to submit the aforementioned Regulations to Parliament for its concurrence.

News

Declaration of Elephant Migratory Corridors to minimize HEC in Monaragala and Hambantota districts

Published

7 hours ago

2026/06/3

Priyan

Wild elephants inhabit approximately two-thirds of the land area of Sri Lanka, and it has been identified that the rapid obstruction of elephant habitats and migratory corridors due to various development projects and human activities has directly contributed to the escalation of human–elephant conflict.

It has been recognised that, in order to mitigate such conflict to a certain extent, the protection of wild elephant habitats and migratory corridors must be undertaken as a matter of urgency.

The Department of Wildlife Conservation is currently engaged in identifying wild elephant migratory corridors in collaboration with relevant Divisional Secretaries, stakeholder agencies, and organisations.

Under the Wild Elephant Migratory Corridor Identification Programme in Monaragala District, the Wild Elephant Migratory Corridor from Handapanagala to Demodara
across Menik Ganga (River Menik) up to Yala National Park has been identified, and approval has been granted by the Monaragala District Coordinating Committee for that.

The Elephant Migratory Corridor from Yala National Park’s Zone VI -Lunugamvehera National Park to Udawalawe National Park has already been declared as the Wetahira Kanda Nature Reserve in 2002.

Within this area, five (05) licensed land plots have been identified, and these lands have not yet been developed.

Accordingly, the Cabinet of Ministers has approved the resolution furnished by the Minister of Environment to take the following measures:

To declare, under the provisions of the Flora and Fauna Protection Ordinance, the elephant migratory corridor from Handapanagala in Monaragala District to Demodara across Menik Ganga up to Yala National Park as a sanctuary.

To provide alternative land outside the wildlife reserve area in lieu of the five (05) licensed land plots located within the Wetahira Kanda Nature Reserve area, and to re-declare the Wetahira Kanda Nature Reserve as an elephant migratory corridor.

To acquire, upon payment of compensation, land parcels containing buildings constructed in a manner that obstruct the Koholankala elephant corridor in the Hambantota District, and to declare the relevant area of the Hambantota Wild Elephant Management Reserve as a sanctuary.