Coconut Prices Skyrocket: A Crisis for Sri Lankans with No Immediate Relief in Sight

Coconut, an essential ingredient in Sri Lankan kitchens, has become a luxury many cannot afford. From Pettah's bustling markets to Dambulla's quieter streets, prices have surged to unprecedented levels. On December 8, 2024, a visit to the local market revealed a half-coconut costing as much as 90 rupees. This sharp price increase is only the latest chapter in a troubling story that has seen the cost of coconuts rise by 63% over the past year. Retail prices that averaged Rs. 120 per coconut in December 2023 have now reached as high as Rs. 195, making it a staple out of reach for many households.

The Rising Coconut Crisis: Causes and Consequences

This dramatic price hike is not just a passing fluctuation; it results from a complex set of factors built up over several years. Experts point to a combination of poor policy decisions, adverse weather conditions, and global supply chain issues that have contributed to the crisis. One of the most significant factors is the long-term effects of the fertiliser ban imposed by the government in 2021. While intended to reduce the country's dependency on imported chemicals, the ban has devastated agriculture, particularly coconut cultivation.

A coconut tree takes several years to bear fruit, meaning the impact of disrupted fertiliser use in recent years is only now becoming evident. According to a large-scale coconut grower from Dankotuwa, "The fertiliser ban affected all crops alike. But it takes at least five years for a coconut tree to bear fruit. If we don’t apply fertiliser this year, we will see its effects four or five years later."

In addition to policy mismanagement, adverse weather has also played a significant role in reducing coconut yields. The recent rainy period disrupted the coconut supply chain, and the outbreak of wild animal attacks, which have resulted in the loss of approximately 200 million coconuts annually, has further exacerbated the problem.

But the issue goes beyond local mismanagement; global trends also play a part. Rising global prices have significantly impacted the coconut market. According to the International Coconut Community (ICC), Sri Lanka has seen the largest increase in the price of desiccated coconut this year, with a staggering 30.5% Year-on-Year (YoY) increase. As major producers such as the Philippines and Indonesia have also experienced significant price hikes, importing coconuts from these countries as a solution may not be as effective as anticipated.

Impact on Consumer

The price surge has left many reeling. Coconut is an integral part of everyday meals—from coconut sambol to curries and sweets—and its scarcity is causing a significant shift in food habits. One resident of Borella, Ramani Jayatileka, shared her frustration: "We’ve started using coconut milk instead of raw coconuts because they’ve become too expensive and scarce in the market. A simple rice meal with sambol is becoming impossible for many families."

The increase in prices has significantly altered consumption patterns. Households, particularly in urban areas, have started opting for alternatives like coconut milk and dried coconut, both of which are considerably cheaper than fresh coconuts. However, these substitutes do not offer the same taste and nutritional value as fresh coconuts, further diminishing the quality of local cuisine.

Government Response: Measures to Address the Short-Term Crisis

In response to the crisis, the government has introduced several measures aimed at alleviating consumer pressure. Trade Minister Wasantha Samarasinghe recently announced plans to distribute one million coconuts at a reduced price of Rs. 130 per nut through state-owned Sathosa outlets. Additionally, state-run plantations, including Chilaw and Kurunegala Plantations, have been instructed to supply coconuts at Rs. 110 per nut.

While these measures may provide some immediate relief, they fail to address the root causes of the crisis. The government’s response has been largely reactive rather than proactive, focusing on short-term fixes rather than long-term solutions that could prevent such price surges in the future.

Proposed Solutions: Moving Beyond Imports

Experts agree that short-term solutions, such as importing coconuts from countries like India or Indonesia, could provide some relief. However, the success of this strategy is uncertain. With global prices also rising, it remains unclear whether importing coconuts will significantly reduce local prices. In fact, some experts caution that these imports could even worsen the situation by further driving up local market prices.

The key to resolving this crisis is increasing domestic coconut production and creating a more sustainable agricultural framework. Experts suggest that long-term measures should focus on improving the fertiliser distribution system, supporting coconut growers with subsidies or financial incentives, and ensuring that crop cycles are not disrupted by sudden policy changes. The Coconut Cultivation Board (CCB) has already set ambitious targets to increase production to 4.5 billion coconuts per year within the next five years.

Moreover, better pest management practices and investing in sustainable farming technologies could boost coconut yields. However, these solutions will take time to bear fruit—experts project that it could take up to two and a half years to fully stabilise the coconut market.

A Balanced Approach: Immediate Action and Long-Term Strategy

As both a researcher and a leader, I believe the way forward requires a balanced approach that combines immediate relief with long-term strategic planning. In the short term, importing coconuts could help alleviate some of the pressure on consumers, but this must be done carefully to avoid disrupting the local market. Additionally, the government must commit to more sustainable agricultural practices that support local farmers and ensure the long-term viability of coconut production.

In conclusion, while the coconut crisis in Sri Lanka is severe and multifaceted, it is not insurmountable. By addressing both the short-term needs of consumers and the long-term health of the coconut industry, Sri Lanka can move towards a more stable and sustainable future for its coconut sector. The path forward requires thoughtful policy decisions, strategic investment, and most importantly, a commitment to prioritising local agriculture over short-term solutions that may only exacerbate the crisis.