Sri Lanka’s DC niche price in global market under threat says industry specialist

That won’t happen as our key buyers are in the Middle East – CDA Chairman

By Hiran H. Senewiratne

Sri Lanka’s Desiccated Coconut (DC) industry, which enjoyed a niche price in the international market, is now witnessing a gradual take-over by other coconut producing countries such as Philippines and Indonesia, an industry specialist said. 

"At one time, our products were on top in terms of pricing in comparison to other leading coconut producing countries in the world.  With local exports falling, the Coconut Development Authority (CDA) has yet to find a solution to the disturbing trend", Lalith Godamunne, President, Coconut Growers Association complained.

"Our main competitors for DC were Philippines and Indonesia and their prices were higher ours. As the whole coconut industry revolved around the DC industry, the coconut growers will find it difficult to maintain their lands in the future", he warned.   

Godamunne said that it is need of the hour to 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 exports DC at cheaper prices than Sri Lankan exporters make it difficult to compete in international markets because our cost of production or the farm gate prices are increasing every year, he said. 

CDA Chairman, Sugath Hadunge said there is no reason for losing our niche price market as this was a global trend. Philippines and Indonesia export to the European markets while Sri Lanka concentrates on Middle Eastern markets, he said. 

"Our main DC buyers are in the Middle East especially Iran. With US initiated sanctions on Iran, we have an issue. But Philippines and Indonesia which concentrate on European countries, will also have to face problems due to the recession in Euro zone," he pointed out.         

Duty on edible oil imports was raised to protect coconut oil millers, who were otherwise unable to compete with cheap imports.  Higher demand from coconut oil mills push up the farm gate price of raw coconuts, ensuring better returns to cultivators. But, it also increases the price of raw nuts bought by DC millers, industry sources said. 

In 2012 the CDA is anticipating a coconut yield of 2.9 billion or more. Due to the government’s fertilizer subsidy the projected figure would likely move up further, he said.

 Hits: 12     Send to Friend