Subject - Plantation Crop

Name - W.M.A.I. Wijayathunga

Index NO - 0031
 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).

 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

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

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 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.
 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