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Coconut price decrease imminent

D.J.A. Purasinghe, Chairman CDA

The coconut prices were at an all time high and Chairman Coconut Development Authority (CDA) D.J.A. Purasinghe said that it was because the disparity between the supply and demand.

He said that several meaningful steps were taken by both the CDA and the Government to overcome this situation.

Purasinghe unveils facts behind the recent price-hike for the “Daily News Business” via e-mail interview.

Coconut auction had recorded the highest price per nut after the independence. What was the reason for such a situation?

The reason is the shortage of nuts. This is because of the impacts of the coconut oil industry. The 15 percent VAT on coconut oil manufacturing was removed last year. This resulted in more players setting into coconut oil business and nuts were diverted massively for this business.

After the 1980’s the multi-nationals and doctors created a coconut oil phobia which resulted in a drop of manufacturing of coconut oil. During this era people may be surprised to note that Sri Lanka was not only self-sufficient in coconut but exporting them as well.

What is the present demand for coconuts?

It is estimated to be at around 3 billion nuts. We cannot meet this demand yet.

The total production for 2005 was 2.15 billion. This increased to over 2.7 billion by the end of last year. So there is an improvement. However there is a shortage of 400 million nuts.

With our plans, we see that this gap is narrowing.

Are you planning to import coconut to control increasing coconut prices in the local market.?

No, but we are going to import copra so that more nuts would come to the market.

Thereafter, the prices too would come down.

Can Sri Lanka maintain the same level with low production and fragmentation?

Yes we should do this by better satisfactory management practices which need to overcome this.

What is the situation of the DC market?

This too is affected. They can’t compete the international market due to high local coconut prices. The Government is trying to protect them by importing copra at a lower rate.

We are also suggesting that government consider a duty decrease for coconut oil.

We should also consider banning the palm oil and coconut oil adulteration.

Do you think high coconut price will discourage fragmentation of coconut lands?

Yes, to an extent - what I believe is in land productivity. We only use 29 per cent land productivity.

Balance part is not used.

Other countries use more land for coconut plantations.

What are the new improvements in the new coconut triangle?

Coconut Development Authority is planning to minimise wastage.

Country uses around two billion nuts for domestic level.

They discard water and shells (fibre) new projects are under way to make oil to light lamps from coconut residue.