COP higher than coconut sale price
Coconut growers of Sri Lanka are seriously worried that the farm-gate price of coconut is dropping sharply to the extent that the average growers are compelled to stop maintaining their coconut estates as the cost of production(COP) has become higher than the farm-gate price of a nut.
Growers are alarmed that the present farm-gate price is around Rs. 21 while the cost of production of a nut is around Rs. 35 and are urging the government to work out a formula where the farm-gate price could be an a ‘break-even’ farm-gate price of at least little over Rs. 35 so that the average farmer doesn’t suffer.
The Coconut Growers Association of Sri Lanka (CGA) sensing this concern has launched a campaign to agitate and urge the government to bring a lasting solution and has been meeting in sessions to work out solutions and to make recommendations.
Ranjith Dias, veteran coconut grower and a past President of CGA explained to the Business Times a series of reasons that caused the decline of the farm-gate price of coconut. The main reason he attributed was due to the excessive import of crude edible oil despite the high yield and production locally.
National level farm-gate prices are determined from a weekly auction of coconuts, where the participation of both the industrial consumers (buyers) and growers (sellers) are at a dismal level, Mr. Dias pointed out.
The other reasons are: Absence of price formulas to reflect the minimum cut off price for coconuts; unregulated import of crude palm olein (unrefined and waste) and coconut oil purported to be under a special scheme. It is suspected that such crude/waste oil after refining is released to the local market instead of being re-exported, he said.
He said other issues are that there is uncontrolled adulteration of pure coconut oil with other low quality edible oils marketed with fraudulent trade labeling subject to no verification by the Consumer Affairs Authority and Coconut Development Authority; the sellers’ inability to guarantee the continuity of fresh coconuts for export arising from the ‘ad-hoc’ decisions to ban such exports has moved buyers away from the Sri Lankan market.
He indicated that during 2017 and 2018, palm kernel was imported without any ceiling on the quantity and quality. There are no SLS standards for monitoring the quality, the only quality check done (by CRI) is bacterial examination.
There are allegations, he said that, the use of these low quality kernel has led to the manufacture of substandard desiccated coconuts, coconut milk, etc and the worst is that these are mixed to adulterate the quality products manufactured locally and exported as Sri Lanka produce, which over the years excelled in quality and fetched higher prices in the world market, which Sri Lanka has lost now.
In a bid to avert the impending disaster facing the coconut industry, the CGA has made a series of recommendations to the government and explaining these, Mr. Dias said that the government should permit export of fresh coconut without any service charge and any restriction or limitation. The CGA should publish prominent advertisements in all media to this effect. In addition, the state-owned plantations too should be granted permission to export fresh coconuts.