by Dr Parakrama Waidyanatha

Minister of Trade Bandula Gunawardene is reported to have remarked at some meeting that the current coconut prices can be reduced if people consume soya instead of coconut! Surprisingly, this has come from an educated minister! What rushed to my mind is the supposed utterance of Queen Marie Antoinette: “If no bread why don’t they eat cake!” However, some historians claim she never uttered those words. Let us hope the Minister too did not!

Be that as it may, the Table 1 below shows the current retail price of commonly consumed vegetable oils.

The cheapest vegetable oil in the market is palm oil which is 24% and 34% less than coconut and soya respectively. The price difference is substantial to the low-income consumer. The poor people largely consume not coconut but palm oil labelled often as ‘vegetable oil.S The high price of fresh nuts is because of the poor production last year and now, and reducing consumption of coconut oil will hardly have an impact on coconut prices.

The relative low price of palm oil is because of the very high productivity of oil palm which is, on average, five times that of coconut and 10 times that of arable oils such as soya, corn, sunflower and sesame.

Bit of History

Because of the very high productivity, after the Second World War many South East Asian countries took up oil palm cultivation to meet the increasing global oil demand. Already oil palm cultivations existed in West African countries. It is reported that oil palm use there is as old, if not older, than coconut oil use in East Asia. In fact Malaysia opening up land for expansion of agriculture, and had a land policy of 60: 40 for rubber and oil palm from the early 1960s . However, seeing the growing vegetable oil demand and profits, the then Premier Tunku Abdul Rehman reversed it to 60:40, in 1965. Some of our plantation companies too, but at ‘snail pace’, took up diversifying some of the low-yielding rubber but to date have only about 10,000 ha oil palm.

During the Second World War, with disruption of coconut oil supplies from the east, the west began consuming arable oils such as soya. However, with the resumption of oil supplies from the west after the war, the soya oil lobby attempted everything possible to ban coconut and palm oil supplies to the west. Together with the American Heart Association’s backing, coconut and palm oils were branded as “artery clogging tropical oils”. The attached photo tells it all!

Sadly, however, although several plantation companies made a move to expand palm oil cultivation in Sri Lanka diversifying some of the less productive

rubber lands, the President in a sudden decision without an inSdepth analysis of facts of the matter, banned palm oil cultivation expansion. A written request by a team of 18 experts on the subject including 11 senior professors ended up in the Presidential dustbin, his office informed!

The need for a National Planning Commission

This ignoble happening is an outstanding example for the need for a body of professionals and experts for making major national policy decisions. India has such a Commission from the days of Premier Nehru, and to date Premier Narendra Modi continues with it but with a small name amendment Ironically, a major decision of this commission was to expand the Indian oil palm extent from the current level of 400,000 ha to 2 million using a large share of the irrigated lands currently cultivating some eleven arable oil crops. Because of the low yield of arable oil crops India has a huge palm oil import bill. We should learn from the Indian example!

The President’s decision to ban palm oil cultivation is the claim by villagers in the oil palm growing areas that it causes drying of wells and other water bodies. However, there is no scientific evidence to support this contention. The evidence is that the evapo-transpiation rates perday per hectare of rubber and oil palm are about 32,720 and 35,607 litres respectively, a difference of only 9%. Moreover, given the rainfall rates of 2500-3000 mm per year the in the wet zone the needed water for both crops should be conveniently available. Moreover given the economic returns of the two crops for rubber and oil palm of Rs 280,000 and 630, 000 respectively, the justification for increasing the production of palm oil is overwhelming.

The unrealistic policy of the government to meet the national oil demand from coconut

Our national annual vegetable oil demand is over 180,000 MT of which for consumption as oil and for the food industry is about 120,000MT. The current coconut oil production is a meagre 45,000MT, and that of palm oil from the 10,000 odd ha now under cultivation is about 20,000MT. Given our coconut oil yield of ) 0.8 MT/ha/yr we need an additional 75,000 MT coconut oil just for dietary consumption obtainable from about 93,750 ha. There is doubt whether such an extent of land suitable for coconut is available. The government has set upon expansion of coconut cultivation in about 20,000 ha in the north and east. There is a serious constraint to coconut cultivation in the dry zone because of increased atmospheric temperatures with global warming, causing poor pollen germination and fruit set. Given the various constraints the Coconut Research Institute calculates availability of a maximum of a further 50,000 ha for it. The simple logic is that it is hard to produce our oil need from coconut oil. On the other hand, diversifying an additional 50,000 ha of unproductive rubber could provide our oil requirement conveniently. Given the massive economic benefit of oil palm over rubber, the government’s indecision on the issue is hard to understand.

Cultivating oil palm or coconut in abandoned paddy fields

Estimates reveal some 143,000 acres (58,000 ha) of which over 80% are in the wet zone. Rice is not cultivated in these lands because of very poor returns. Much of these ill-drained lands should be cultivable with coconut or oil palm using the “Sojan” system developed in Indonesia where the crops are grown in raised beds. The drained water can be collected at the bottom of the catena in ponds for fish culture.

Should coconut cultivation expansion be only for the oil?

The biggest demand now of coconut globally is for the coconut water as a sports drink. It is expected to grow four fold over the next five years. The anti-oxidant and other health benefits are some reasons for it. Because all the health benefits are retained on dehydration of the water to form a powder, the latter is used widely for addition to other drinks. The American Chemical Society has recommended it as a sports drink. There is also a huge demand for tender coconuts. As shown in the picture below partially de-husked tender coconuts are a common site in foreign supermarkets. A tender coconut shown in the picture is 4.25 Singapore dollars! The potential for export of tender ‘Thambili’ nuts appears huge, and the ill-drained lands should be quite suitable for cultivation of this crop for export.

As per the data in Table 2, the export market for coconut milk products has grown far in excess of the coconut oils.

In conclusion, coconut is a multipurpose commodity , and its expansion need not necessarily be only for oil production for the local demand, but based on the market demand and profitability of the various products globally. The government policy to meet our entire vegetable oil with coconut oil is untenable given the limited land availability. Converting about 50, 000 ha for oil palm is very rational and if the rubber land diversification is to be stopped, the ideal option is the use of the abandoned paddy lands involving smallholders of those of lands. Some 35% of the global palm oil production is via smallholdings.