November 21, 2019
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    Coconut: Potential for a $ 1 b export industry

    February 24, 2019

    Coconut was at one time, the edible vegetable oil with a huge demand in the world market, for its taste, long shelf life and for other quality attributes. Coconut lost its popularity in 1960s because of the erroneous conception that consumption of coconut oil leads to heart diseases. Coconut oil is designated as a saturated fat along with animal fats without considering that coconut oil is a great source of Medium Chain Fatty Acids (MCTs; 62-65%).

    MCTs are absorbed and digested easily and converted into energy quickly. Unlike animal fat which comprises a large proportion of Long Chain Fatty Acids (LCTs), coconut oil is not stored as fat or raise cholesterol in the body, and therefore, is not harmful to human health. The misconception about coconut is now completely demolished, and instead, many health benefits of coconut have been discovered.

    Coconut, in the form of virgin coconut oil (VCO) and coconut water has an emerging and expanding market world over. The 2015 export and import commodity data indicated that there was a growing market for coconut oil in the USA, China, Korea and the European Union.

    The global coconut water too has a market which is expanding robustly. Global coconut water consumption hit 3.9 billion litres in 2016. The coconut water market in the USA continues to boom. There are several other markets that hold even further potential.

    In the UK, coconut water is quickly catching up with the US and estimated to become a £100 million retail category. Japan has the potential to be worth almost $500 million by 2019 as coconut water appeals to demands for functional wellness products.

    King coconut

    People in coconut producing countries must think on these newly opening markets for coconut. Brazil is the world leading coconut water exporting country while about two million young coconuts are harvested per day in Thailand, one million as fresh nuts sold in the country or exported, and the other million go to the bottled coconut water industry. Thailand also processes nearly one million tender nuts a day for the local and international market.

    The hygiene and quality of coconut products should be of high standards to remain in the international market.

    King coconut (Thambili), as a fresh tender nut, has a growing market internationally while having a continuous and steady local market, as a popular beverage. The Coconut Research Institute invented technology to keep the shelf life of fresh tender king coconut for about six months without changing the attractive outer orange colour and taste of the water for export purposes. With that invention, Sri Lanka which exported about 0.5 million tender king coconut five years ago has increased up to 6 million nuts according to 2018 export figures.

    However, king coconut at the international market, still has a great potential to grow. Sri Lanka is not fully tapping the opportunity yet. Branding king coconut water will have a competitive market internationally as it is an indigenous coconut variety and is unique and not seen in any other country.

    As king coconut is mainly grown as one or two trees in home gardens, a systematic collection and substantial farm gate price will ensure a better growth of the industry. A better farm gate price will further encourage growers to cultivate king coconut on a large scale.

    In Thailand, most coconut plantations produce 140 to 240 tender nuts per palm per year. The return is said by local stakeholders to be about 1000 Euros per hectare. When calculating with 200 fruits per palm, 200 palms per hectare, and 0.26 euros per fruit, the gross income is up to 10,400 Euros per hectare – so the return may be much more than 1,000 Euros per hectare.

    The desiccated coconut (DC) and coconut byproducts, such as coir and shell products also continue to retain its demand in the international market, although there has been a temporary setback in recent times for DC.

    Compared to the present small international market for the emerging coconut products; the value-added traditional coconut products, such as DC still have a steady international market. Any other novel value-added coconut products have a small market share, but have the potential to increase the market share in the local and international market.

    This recent stimulated and upstretched coconut market and the market opened for value-added traditional coconut products, lay a foundation for profitable coconut cultivation in Sri Lanka.

    Coconut production in most growing countries, including Sri Lanka is stagnant mainly due to poor management of coconut lands and that most of the plantations are overaged and senile.

    Besides, in Sri Lanka, a higher proportion of production (70%) is domestically consumed, leaving only around 800 million nuts for the export market. Coconut and coconut byproducts exports earn about USD 0.6 billion turnover.


    However, the country has the potential, and the line ministry has the vision to increase the coconut industry’s export earnings to USD 1 billion. There is a need to increase coconut production in the country and tap the international market wisely.

    There are many ways to increase coconut production and productivity in coconut lands. Global information indicates that the majority of the coconut palms in growing countries are poorly managed. Reports indicate that only a small proportion of the coconut palms in Sri Lanka receive fertiliser in the chemical or organic form.

    This needs to be addressed by making fertiliser available to coconut growers at affordable prices or continue the recently implemented fertiliser subsidy, at least at the present price level for another five years, increase access to fertiliser by appointing village level fertiliser dealers so that growers can collect their fertiliser requirement easily, promote fertiliser use by small scale growers by introducing convenient size fertiliser packs (3.3 kg packs is the suitable pack size as 3.3 kg is the recommended dose of fertiliser for coconut per year) to promote fertiliser use among small-scale and low-income growers. Mass media awareness campaigns need to be conducted to increase fertiliser use.

    The preparedness for drought by farmers is poor and even the simplest practice of putting up of a mulch (soil cover) around the palm, to conserve moisture, is practised only by a limited number of growers. This attitude can be changed by giving coconut producers a better farm-gate price. This will encourage growers to manage their coconut lands in a healthy condition to increase production.

    However, consumer and entrepreneur protection are also equally necessary. This can be achieved by using national coconut yield prediction well in advance and based on predicted production figures, adjusting import tariffs of other edible oils or other coconut-based products and or switching on and off their other coconut-based exports other than the major coconut export commodity.

    For example, DC is the major kernel-based export commodity of Sri Lanka, the international price of which often controls the farm-gate price of coconut. When there is a surplus production in the country, the demand for coconut by the DC industry becomes less, resulting in a low farm-gate nut price.

    This sometimes, goes to an extreme extent that the cost of production of a nut is higher than the farm-gate nut price. When higher production is anticipated through yield prediction, the import tariff of other sources of oil is increased in the country leading to to a boost in local oil production absorbing the surplus nuts or converting surplus to milk powder which can be used in lean periods.

    If further action is necessary, export tariffs for other coconut products are relaxed, for example for fresh nut or tender nut export, further removing predicted surplus nuts from the local market. Encouraging large and medium size land coconut growers to adopt rain water harvesting, providing them with technology and government assistance to construct water ponds in coconut lands will help address drought preparedness.

    Scientific management of coconut lands using improved cultural practices, rehabilitation of coconut lands, replanting senile coconut trees with genetically superior seedlings are other important considerations in increasing coconut production. The government subsidy schemes should be directed towards such activities, and any coconut planting programs should aim at coconut growers, rather than politically attractive programs.

    Land suitability information should be used, for example, to decide where to plant coconut and where to plant early bearing and high yielding hybrid coconut. Specially hybrid coconuts when planted in the right places with right management conditions, give a yield of 40-50% more than tall coconut cultivars.

    Pests of coconut contribute to crop loss both nut yield and growing seedlings and bearing palms. The private sector’s contribution should be obtained to control pest in coconut lands. For example, mass production and distribution of predatory mites for Aceria coconut mite and its application in the estates through an organised workforce, production and distribution of pheromones and pheromone traps for Red Weevil and Black Beetle at village level.

    The government sector, through the Coconut Cultivation Board, needs to organise area-wise mass trapping of Red Weevil and Black Beetle to reduce pest population. The Coconut Research Institute developed an improved red palm weevil aggregation pheromone formulation and a new gel dispenser for the pheromone. A pheromone for catching black beetle was also developed. These new innovations need to be commercialised.

    Expanding coconut cultivation to non-traditional areas is another important strategy in increasing yield by expanding land area, but it has to be done with great care. Potential lands should be identified not just based on the suitability of soil conditions, but also based on the suitability of climatic conditions (i.e: temperature and rainfall) and the availability of water that determine the yield of coconut palm.

    Sri Lanka has bad experiences in expanding coconut cultivation to certain parts of the dry zone, where coconut production was limited by high temperature and low rainfall and to a great extent by the combined effect.

    Local consumption

    In countries where a considerable proportion of coconut production is used for local consumption, a considerable proportion of their production is wasted due to less efficiency in extracting coconut milk in households. If this can be side-stepped, many nuts can be saved and directed to the industry. For example, around 750 million nuts can be saved in Sri Lanka by this method.

    One way to do this is the processing of coconut milk (or milk powder) within the country enabling consumers to use locally produced coconut milk. These processed coconut products, however, should be made available at an affordable price and in a convenient sized container and even as sachets for the low-income families.

    The practice of housewives is to buy coconut or use their own coconut, de-husk and scrape them at home and squeeze milk by hand and use them fresh for food preparation. This is a labour intensive and a time-consuming process. Two leading food manufacturing companies recently launched a hygienically produced premium liquid coconut milk in UHT packs with about one-year shelf life to the local market. Their products seemed to be slowly and steadily gaining popularity among consumers, because of the convenience in use.

    This market trend, additionally, but importantly, helps coconut byproduct manufacturers by gathering husk, shell and coconut water in one place, making these byproducts easily accessible raw materials for industries, which otherwise would have ended up as waste in households.

    Sri Lanka does not have a mechanism to collect coconut shells and husk of coconut waste in households islandwide, although, a mechanism has been developed to collected about 40-50% of the coconut shells from households. If a mechanism is developed, a large quantity of these byproducts can be collected and converted to value added products (activated charcoal, coir and coir products) which has a high demand in the international marker, but unfortunately cannot be met due to shortage of raw materials. Sri Lanka even imports coconut shells from other countries.

    International market

    The hygiene and quality of coconut products should be of high standards to remain in the international market. Better and well administrated quality control systems need to be in place for coconut-based products, including for VCO, coconut water to retain the market. There are indications that Sri Lanka lost markets by supplying poor quality coconut products.

    A well-planned and well-coordinated research program towards the well-being of the coconut industry fitting in with local needs and problems and an effective and efficient dissemination of research findings as recommendations to the growers and entrepreneurs are also an important aspect in coconut development programs. However, focus should be on applicability and practicability and the cost of recommended practices before a recommendation is given to farmers.

    The institute carrying out research programs needs to be strengthened. Scientists and other key officers engaged in coconut research and development should be consulted in the policy development and decision-making processes. If every need is well cared, it is not a difficult task to develop the coconut industry to meet the national target of US $ one billion export earning.

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