32% increase in desiccated coconut exports

by Elmo Leonard

Sri Lanka exported 15,871 tonnes of desiccated coconut during the first six months of this year, valued at Rs. 8.5 billion ($ 82.9 million) as against 9,961 tonnes during the corresponding months of 2005, which brought in Rs. 7.4 billion ($ 74.1 million) according to the Customs.

This 32 percent increase in exports (volume) of desiccated coconut is generated by rising global demand for vegetable oils, which is being diverted into emerging bio - fuel industries in a bid to offset the galloping prices of crude.

Sprouting bio - fuel industries in Malaysia and Indonesia (two large vegetable oil producers) and big plants in European countries are pushing prices of vegetable oil up, Public Ledger, UK says. And, Malaysia and Indonesia will transfer 12 million tonnes of its vegetable oil into its bio-fuel industries this year.

Philippines, the largest producer of coconut oil is also expected to siphon in 1 percent of its coconut oil production into its bio - fuel industry, while studies show that engine performance runs smoothly with the use of coconut oil in fuel, Coconut Development Authority (CDA) acting deputy marketing director, V. Balakrishnan said.

Another factor which makes Sri Lanka's desiccated coconut competitive in the global market after a lapse of over 18 months, is the increased coconut harvest for the current year, estimated at 2.8 billion nuts, as against 2.5 billion during 2005. Last week, Sri Lanka's desiccated coconut sold at Rs. 85,000 per tonne at home and $940 - 950 CIF Rotterdam per tonne.

Philippines, at $960 per tonne CIF Rotterdam and Indonesia, $920 per tonne CIF Rotterdam. Comparably, during most of last year, Sri Lanka's desiccated coconut price was around $100 over its competitors per tonne, restricting the island's exports to some Middle Eastern destinations. "Now, we are regaining European markets, we had lost to Philippines and Indonesia," Balakrishnan said. Indonesia's desiccated coconut has forwarded contracts for the year.

Meanwhile, 250 to 300 Baby Expeller coconut oil mills have gone into production and medium size mills are also coming in, Balakrishnan said. But, CDA figures are, 20,000 tonnes of coconut oil produced in 2005 and 35,000 tonnes targeted for 2006.

Last week, coconut oil sold at Rs. 90,000 - 91,000 per tonne ($87.9) while in August 2005 coconut oil traded at home at Rs. 101,000 per tonne according to CDA statistics.

Comparably, last week, the international price for coconut oil was $620 CIF Rotterdam per tonne. But, imports of coconut oil would involve 28 percent tariff and 15 percent VAT, Balakrishnan said. Palm oil which sold at $500 CIF Rotterdam per tonne, requires the payment of the same duty structures, when imported for mixing with coconut oil to feed the mass domestic market.