Present Status and Future Protential Of

Coconut Cultivation

 Introduction
The coconut tree (Cocos nucifera) is a member of the palm
tree family (Arecaceae) and the only living species of the genus Cocos. The term
[

"coconut" (or the archaic "cocoanut") can refer to the whole coconut palm,
the seed, or the fruit, which botanically is a drupe, not a nut. The name comes
from the old Portuguese word coco, meaning "head" or "skull", after the three
indentations on the coconut shell that resemble facial features. They are
ubiquitous in coastal tropical regions and are a cultural icon of the tropics.
Sri Lanka is the fifth largest coconut producing country in the world which yields
2,500-3,000 million nuts per annum. In general, two third of the production
consumes locally as fresh nuts and the rest, dedicates to agro-industries. From
2015 to 2019 an upward trend for coconut based products were clearly visible
with a earning of US $609.77 million foreign exchange and a contribution of
7.42% to the GDP of the agriculture sector in 2019. Kernel-based products were
the most popularized and dominant category compared with non-kernel. Coconut
grown in Sri Lanka has unique characteristics since it delivers favourable kernel
taste. Therefore, Sri Lanka has a competitive advantage over coconut in the world
market. However, as a result of low productivity, adverse climatic conditions,
land fragmentation for housing purposes along with the gradual increment in
domestic consumption has created a critical shortage of nuts for industrial use
(Jayewardene, 2018; Pieris & Kularathne, 2015). Simultaneously, industrial
usage of coconut has also increased as a result of ample opportunities in
international markets. This attracted many new entrants recently into the
industry seeking more prospects (Pathiraja et al., 2015). However the central
question focuses, whether these agro-industries are sustainable enough to cater
the flourishing demand and ready for the next leap in the sector creating
favourable prospects. In light of this, it is pivotal to understand the real context of
the coconut kernel-based industry and its nature. Hence, study attempted to
explore the current status, constraints and opportunities in the coconut kernel-
based industries in Sri Lanka

 History
 The Coconut (Cocos Nucifera Linn) is regarded to be of ancient origin and
cultivated by people of Ceylon for its various uses for over thousands of years.
 According to early Greek Chronicles, it was Megasthenes, Ambassador of the
Seluces Nicater, who told the Indian King, Chandra Gupta about the Coconut
Palm, he found in Sri Lanka in 300 BC. “The island, then, in the great sea,
which they call Taprobane, has palm-groves, where the trees are planted with

1
 wonderful regularity all in a row, in the way we see the keepers of pleasure
parks plant out shady trees in the choicest spots.”
 Fa Hian in the fifth century A.D. claimed to have found coconuts and arrack
available in Ceylon. Arab Traders Ibn Wahab and Abu Seyd are said to have
had draughts of arrack in Ceylon, in the fifth century A.D.
 Hence it is evident that the coconut was established in Ceylon by the dispersal
and dissemination from the original home of Cocos Nucifera Linn either by
the hand of man or by nature.

 Sri Lanka’s Coconut Export

Performance
In the last decade, there has been steady growth in the export performance of the
coconut industry in Sri Lanka, with a significant increase in export value between
2020 and 2021. The export earnings from coconut products in 2021 was
USD836.1 million, which is a 25.80% growth compared to the preceding year.
Apart from the expansion of the consumer class and the post-Covid pent-up
demand for commodities worldwide, the main contributor to the increase in
demand for coconut products is the trend for healthy and organic food and
beverages. The gradual global recovery from the pandemic is proving a boon for
many coconut suppliers.
A majority of coconut kernel products are also gaining a positive reputation as
healthy alternatives for commonly consumed products, such as dairy milk. Active
Carbon produced from coconut shells is one of the most successful coconut
exports due to increasing demand from water, air, and mineral purification
manufacturing. Furthermore, new trends in vertical farming and other forms of
agriculture have contributed to the increase in demand for coco peat products
and coconut coir products.

Sri Lanka’s bumper harvest of coconuts in 2021 could also have contributed to
the increase in coconut exports during the year.
In 2021, the Sri Lankan Rupee depreciated by 10%, leading to local products
becoming significantly more competitive in the international market. This meant
that there was increased demand for Sri Lankan coconut products, against
competitor coconut producing countries

Sri Lankan coconut industry exports Source: Export

Development Boar

2
 Increase in Demand for Coconut
Products Globally
Transparency Market Research has predicted rapid growth in the coconut
industry from 2021 to 2031 based on recent studies on market behaviour.
Increasing awareness of the health benefits of edible coconut products and
growing demand from developed countries—such as North America and certain
European countries are major factors that drive the growth of the industry.
Increasing global awareness of the benefits of coconut oil, especially in
comparison to other oils, is making it a more viable option for consumers,
leading to coconut oil growing in popularity as a food ingredient. Furthermore,
coconut oil is widely used in cosmetic products, such as hair oil and soap for its
natural emollient properties. For example, multinational company Unilever
launched its first sustainable beauty brand Love, Beauty and Planet in recent
years, and a primary ingredient in the range is coconut oil
Coconut water, which is high in natural nutrients and electrolytes, is gaining
popularity among health-conscious consumers as a natural energy drink. Vita
Coco, one of the leading global coconut water brands, conducted its Initial Public
Offering (IPO) in 2021 on the back of strong demand for coconut water.
Coconut milk is considered a healthy alternative to dairy milk, gaining immense
popularity, especially among the vegan consumer segment. Other edible
derivatives such as coconut sugar, chips and cookies are also growing in demand
for associated health benefits.

 Sri Lanka’s Coconut Harvest in 2021

Sri Lankan coconut industry exports Source: Export

Development Boar

The coconut tree requires a significant volume of rain for successful growth, and
the island had great rainfall in 2021, which very likely contributed to the increase
in harvest.
Furthermore, Sri Lanka’s Coconut Research Institute encouraged cultivation and
coconut land productivity in recent years with newer breeds, better intercropping

3
strategies, better pest control mechanisms, improved fertiliser applications and
other measures, which are beginning to bear fruit in terms of increased harvest

 Challenges Faced by the Coconut Industry

One of the most challenging circumstances that the industry—along with the
country’s entire agriculture sector is facing—is the loss of crop due to the organic
fertiliser policy introduced by the government.
Industry representatives have spoken to the local media stating, that Sri Lanka’s
coconut production will be detrimentally impacted if much needed fertiliser is
not made available to coconut suppliers urgently. If the change does not take
place in a timely manner, many in the industry believe that the island will have to
opt to import coconuts by 2025, instead of being one of the primary exporters of
coconut to the world
Another burning issue faced by the industry in the current economic context is
fuel and power shortages, which have a damaging effect on production capability.
Daily power outages interrupt the production process, and although many
factories are equipped with generators, the challenge of limited fuel supply in the
country means that there is no consistent guarantee that generators can be
utilised when needed. This makes the threat of losing business to producers in
other countries an unfortunate possibility.
“In the month of March 2022, we had to operate several days at lower capacity
due to extended power cuts and lack of diesel to operate our generators,” says a
manufacturer of coconut flour in Sri Lanka who wanted to keep his last name and
company name confidential.
The world is currently facing a number of challenges stemming from the Russia-
Ukraine war. For example, the production and trade of commodities which are
predominantly exported by Russia and Ukraine, such as energy and
fertiliser have been severely disrupted. This impact is also felt rather strongly
here in Sri Lanka, especially with regard to growing crops.
In addition to these challenges, exporters also rely on imported packaging
material to honour their orders. “The dollar shortage in the country means that
imports for re-export purposes are also delayed, since banks either place
restrictions on remittances or take longer than usual to source the foreign
exchange,” comments Surangi Bullivant from Sula Pvt Ltd, an importer of
packaging material for the Sri Lankan coconut oil export industry.

4
 Future Protential of Coconut Cultivation
 Pests of insects, diseases, damage from Animals and land
fragmentation affecting coconut cultivation.
 Waste in local coconut consumptionSevere Drought in the Last few
years
 High Demand for Coconut And Coconut Related products in the
Foreign market.
 Decline in Coconut Productivity Due to reduced interest of coconut
growers in coconut cultivation.
 Severe Drought in the Last few years