Coconut glut to peak in mid-June

by Elmo Leonard

The increasing glut of coconuts entering the market is expected to peak in mid-June and plummet the farmgate price below the critical COP of Rs. 8.50 per nut. Intermediate market forces are exploiting this rain-fuelled oversupply situation with hard-buy tactics on growers, beggaring them, while denying the consumer the benefit of the prevailing low prices.

Coconut Development Authority (CDA) in its bid to contain this unhealthy manoeuvre, Friday, May 26, stepped into the coconut auction in Beliatta in the deep south and purchased 100,000 coconuts at Rs. 10-12 per nut, depending on size. The coconuts were retailed with a very low margin of profit, CDA director finance, Kumar Kumarage said.

CDA is expected to step in again this week, into Beliatta or other CDA conducted auction centre in its efforts to give the farmer a better price and the consumer a "reasonable deal," Kumarage said.

Sri Lanka's coconut harvest is expected to hit 2.8 to 3 billion nuts during the current year, from a yield of 2.5 billion coconuts for 2005.

The supply of coconuts is known to peak in mid-May. This year, the peak is yet to come depending on rainfall received 350 days earlier, the CDA said. While growers are anxious about prices they receive, which they say is about break even, coconuts are retailed in Colombo and its suburbs at Rs. 12 to 18 per nut, CDA acting deputy director market development, V. Balakrishnan said. CDA conducts a coconut auction in Colombo on Thursdays, copra auctions on Wednesdays and Fridays.

Weekly coconut auctions are also conducted in Beliatta and Kuliyapitiya with an expected outreach extended to Kurunegala in July.