Shortage of nuts hits employment in DC industry

by Lalin Fernandopulle

The desiccated coconut industry has been adversely affected with a loss of around 10,000 direct and 20,000 indirect employment, due to the severe shortage of coconuts in the country said a spokesman for the Sri Lanka Desiccated Coconut Millers Association.

The desiccated coconut industry, one of the main revenue earners in the country has been facing a major setback during the past four to five years. The industry had a export turnover of Rs. 5,500 million last year.

Edible oil which was imported at 10 per cent duty increased to 28 per cent from January 1. As a result of the increase of duty on the import of edible oil during the off season the price of edible oil has risen. As the country does not have the capacity to produce the required amount of coconuts it has to import edible oil to bridge the gap.

"The adverse weather conditions and the fragmentation of lands and unfavourable duty on edible oil are the primary reasons that hindered the growth of the desiccated coconut industry", he said.

There weren't sufficient coconuts for processing during the past five years due to the drought, mite attacks and fragmentation of land. Many of the factories have closed down and work has been restricted to a few hours a week. Sri Lanka has 60 desiccated coconut processing factories.

He said over 30,000 families depend on the industry in the rural sector and when such a disaster hits the industry it takes a considerable time to revamp and get the industry back on track.

Due to the shortage of coconuts for processing the industry has lost a major share of the European market and now it is focusing on the Middle East market. If the industry cannot overcome the crisis it will lose the rest of the markets to its competitors.

The major exporters of desiccated coconuts are Philippines, Indonesia, Vietnam and Malaysia. Sri Lanka exports desiccated coconut to Europe and the Middle East. Of the total production around 70 per cent is used for domestic consumption.

The average consumption of coconuts is around 1,900 million nuts annually. The desiccated coconut industry requires 500 million nuts per year.

"Edible oil is imported as a substitute for coconut oil. Even if the total production of coconuts is used to produce only coconut oil it cannot meet the country's coconut oil requirement", he said.

The price of a nut and coconut oil has increased due to the scarcity of coconuts. The price per nut ranges from Rs. 35-40 while a bottle of coconut oil is Rs. 200.

A proper fiscal plan on the duty structure is needed to support the desiccated coconut industry. The price will drop with the rains expected in April.

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