ECONOMYNEXT - Sri Lanka's fresh coconut prices have started to fall sharply at auctions, with many desiccated coconut and oil mills which halted production when prices peaked earlier in the year, yet to resume work, industry officials said.
Average price for 1,000 nuts which hit 64,156 rupees in January 2018 had fallen to 45,162 by July.
Retail prices of a coconut are around 60 rupees a nut in August down from 85 rupees in January.
In August farmgate prices had shown signs of edging lower, with the sellers withdrawing most of the volumes offered at the weekly auction in Colombo amid weak demand.
Average auction prices were around 37,000 rupees per 1,000 nuts in early 2017 when a drought cut production leading to steep rises in prices.
This led to many desiccated coconut mills losing international buyers to other Asian nations, who then halted production.
Now coconut prices in the Philippines have also since fallen, industry officials said. Though there is no free import and export of fresh coconut, international prices percolate to Sri Lanka through the desiccated coconut market.
Trends in palm oil prices also have an impact on coconut.
Most Sri Lankan desiccated coconut mills are still out of business, which was the key cause of weaker prices, though production has also not recovered substantially.
At least one coconut milk powder brand cut prices recently, which may increase the demand for fresh coconuts.
Coconut oil mills had also stopped production as prices rose. Yea-to-date oil production was down by about two thirds, industry officials said.
If fresh coconut prices fall further, both oil and DC mills are likely to resume production, leading to greater demand. (Colombo/Aug09/2018)