Sri Lanka’s Desiccated Coconut (DC) industry which enjoys a niche position in the international market was now gradually losing it to other coconut producing countries like the Philippines and Indonesia, a coconut industry specialist said.
"One time Sri Lankan DC enjoyed a niche position as against produce of most of the other leading coconut producing countries in the world. Now local exports have fallen and the Coconut Development Authority (CDA) has yet to find a solution for that," President Coconut Growers Association Lalith Godamunne told The Island.
He said our main competitors for DC were the Philippines and Indonesia and their prices were higher than our prices. Since the whole coconut industry revolved around the DC industry, the coconut growers will find it difficult to maintain their lands in the future, he said.
Godamunne said that "it is the need of the hour to have or work out a formula link to international prices for coconut producers like the tea industry, which will help the sustenance of the sector because the current price variation throughout a year will have a negative impact on the coconut industry".
Further, Vietnam, which is exporting DC at cheaper prices than Lankan exporters made it difficult for them to compete in international markets because our cost of production or the farm gate prices were increasing every year, he said.
Chairman CDA Sugath Hadunge however said that there was no reason for losing our niche markets as this was a global trend. Philippines and Indonesia exported to the European markets while Sri Lanka concentrated on West Asian markets, he said.
"We have hit a snag as our main DC buyers are in West Asia. Since Iran had been imposed sanctions by the USA, we have an issue in that market. But the Philippines and Indonesia concentrate on European countries for their DC exports, they too will likely have problems due to the recession in Eurozone ," he added.
Duty on edible oil imports was raised to protect coconut oil millers, who were otherwise unable to compete with cheap edible oil imports. Higher demand from coconut oil pushes up the farm gate price of raw coconuts, ensuring better returns to cultivators. But it also pushes up the price of raw nuts bought by DC millers, industry sources said.
Further, in 2012 the CDA is anticipating a coconut yield of 2.9 billion or more, due to the government’s fertiliser subsidy that estimated figure would likely move up further, he said.