The Coconut Industry of Sri Lanka: Glorious Past, Dismal Present, Uncertain Future

by Dr. P.G.Punchihewa

"It’s an old and common saying, the coconut tree afford meat, drinks, and cloth; true, but far short to my own knowledge; besides I shall add, toddy, wine, vinegar, oil, milk, and honey all eatables: but besides it afford other necessaries as mats, brooms, bottles, dishes and ropes." - Robert Knox

Long before Knox, coconut had played a vital role in the lives of the people of Sri Lanka. The first coconut plantation in the island, (cocopalm garden three yojanas in length) may be even in the world, was established during the reign of Aggabodhi I, according to Mahavamsa. He ruled from 571 to 604 A.D.

But Knox’s statement was the first which spelled out the many uses of the coconut tree so vividly.

Coconut, a subsistence crop, had to await the arrival of the colonial powers to the island, particularly the British, to be made into a plantation crop. With the finding of new uses of coconut oil in the manufacture of margarine, candles and soap in Europe, the demand for coconut oil increased by leaps and bounds. Accordingly, all the major colonial powers started the cultivation of coconut in their colonies - the British in India and Sri Lanka, the Dutch, in the East Indies, the French in Africa and the Germans in the Pacific. The Foreword written by Sir W.H. Lever, the founder of Lever Brothers, to ‘Coconuts-the Consols of the East’ by Smith and Pape, speaks of the keen interest shown by the British in the cultivation of coconut.

"I know of no field of tropical agriculture, that is so promising and I do not think in the whole world there is a promise of so lucrative an investment of time and money as in this industry. The world is only just awakening to the value of coconut oil in the manufacturing of artificial butter of the highest quality and of the byproduct copra cake as a food for cattle."

Accordingly, the colonial government encouraged the cultivation of coconut, particularly in the North-West of the island. "The rapid expansion of the coconut industry had begun in the late 1850s, but the pace had been accelerated in the 1860s. The acreage went up from about 250,000 in the 1860s to 850,000 in the first decade of the 20th century. (K.M. de Silva:A History Sri Lanka page 287)

Apart from encouraging the rapid expansion of the area under coconut, the English diverted the industry to processing of coconut products as well. The establishment of a crushing plant for milling copra into oil and copra meal commenced around 1830 and there had been regular shipments of oil from Ceylon to Europe. In 1853 Sri Lanka had exported 1,033,900 gallons.(Samuel Baker: Eight Years in Ceylon: pg 158).

In 1855 soap making commenced and several kinds of soap were produced and exported. Sri Lanka was thus ahead of most of the coconut producing countries that were continuing to export only copra.

The 19th century also saw Sri Lanka taking another important step in processing of coconut products.

Following the industrial revolution, the need arose for a cheap ingredient for the ever increasing demand for candy among the working class in UK. Coconut proved to be ideal. But the practice at the time to import the whole nut was cumbersome and expensive. Experiments had been carried out in U.K to find a solution. It was discovered that grated coconut meat heated on steam tables resulted in it not becoming rancid and the result was desiccated coconut. The first desiccated coconut factory was established at Dematagoda and by 1890 Sri Lanka had exported 6,000 tons of desiccated coconut. In 1900 it had gone up to 60,000 tons. At that time, Sri Lanka was the leading exporter of desiccated coconut.

Similarly, the first fiber mill was set up in the 19th century and in 1853, 2,380 tons of coir had been exported.

But that is the past. What about the present and the future? Dismal and uncertain.

Though Sri Lanka was the first to export desiccated coconut with 60,000 tons in 1900, over the years her competitors have overtaken her. In 2013, export of desiccated coconut from major exporting countries was as follows.

Metric tons

Philippines 116,115

Indonesia 75,930

Sri Lanka 33,273

Export of coconut oil (in MT) from the same three countries was as follows,

Philippines 1.096,861

Indonesia 630,568

Sri Lanka 3,821

In 1985 Sri Lanka had exported 52,000 metric tons of desiccated coconut and 64,000 metric tons of coconut oil.

There are number of factors responsible for this huge drop in exports. While the Philippines and Indonesia have vast extents brought under coconut, running into several millions of hectares, in Sri Lanka coconut acreage is shrinking due to urbanization, pests, diseases, and drought. From a peak of 1.15 million acres in 1962 the area under coconut had decreased to 0.976 million acres in 2002. In 2006 ‘Weligama Wilt’ was reported and it was estimated that 300,000 palms at the initial stages and more in repeated cycles had to be removed. Production of coconut has remained static. Since 1980 Sri Lankan coconut production had exceeded the 3,000 million nuts mark only twice. That was in 1986 and 2000.The average yield hovers around 2,500 nuts per acre per annum.

With increasing population, exportable supply declined. In 1981 the population of the island was 14,846,000. In 2012 it had gone up to 20,277, 597. Domestic consumption is eating into exports. It had gone up from 1,784 million nuts in 1980 to 2,481 million in 2012. Shortfall in production is met with the import of more and more alternative vegetable oils. (In 2014 more than 100,000,m.t of crude palm oil, palm kernel oil, soya and sunflower oil and coconut oil have been imported to Sri Lanka.)

Efforts made to increase production and productivity had not had much effect.

Sri Lanka has introduced only three high yielding varieties since 1960.But these cannot meet the demand. The total number of seedlings issued since 1980 up to 2012 is nearly 70,000,000 according to Sri Lanka Coconut Statistics 2012.On the basis of 64 trees to an acre this should cover an area of more than 1,000,000 acres! Obviously there is something wrong with the quality of seedlings!

As it is, there is no likelihood of increasing production/productivity in the immediate future.

An opportunity Sri Lanka has missed is in the processing and exporting of coconut water which remains a waste product. Neither the government nor the private sector had made a genuine effort to penetrate this new market. In 2013, desiccated coconut production was 29,200 metric tons. To produce one ton of desiccated coconut about 8,000 nuts are needed. That is about 2.4 million nuts of which the water, at least a part, could have been used as a Ready to Drink (RTD) product.

"The total global packaged RTD coconut water market is estimated to be worth close to $600 million in 2013, with US and Brazil leading consumption growth. It is known for being a nutritious, refreshing, and rehydrating beverage and is convenient to purchase and consume. The versatility of coconut water allows for many innovations in this category. (Cocoinfo International vol. 21 no 2, 2014)

Among the main exporting countries of RTD are the Philippines, Indonesia, Thailand, Malaysia, Vietnam and India. (The production of coconut in Malaysia, Vietnam and Thailand is comparatively less than that of Sri Lanka.)Exports from the Philippines from 2009 to 2012 was as follows,

Sri Lanka was the pioneer in exporting coconut products to the world. Even in processing of coir dust she showed the way. Surprisingly, the Sri Lankan coconut industry had not shown much interest in producing a RTD product for export. The Middle East should be a market that could be tapped. Now, technology must be freely available. Already Sri Lanka is falling by the way side.

(The writer held the posts of Secretary Ministry of Coconut Industries and Executive Director, Asian and Pacific Coconut Community, Jakarta.)

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