ECONOMYNEXT – Sri Lanka’s coconut production dropped 18.6 percent to 2.449 million nuts in 2018 amid a drought, from 3.011 million a year earlier, central bank data showed.
A severe drought in 2017 reduced output. Minister Dayasiri Jayasekera told reporters that in Kurunegala, a top coconut producing area, about 100,000 trees had died.
Coconut, however is an indirectly traded item and is subject to international prices due to exports of coconut products and also imports of close substitute like oil.
A drought also hit India and some other coconut growing countries. Coconut prices in India rose from about 25 to 30 Indian rupees to 40 to 45.
Amusingly Sri Lanka’s central bank has blamed coconuts for pushing inflation up, while depreciating the currency.
Coconut oil which was about 1,100 US dollar a tonne in January 2015 hit a peak of about 1,800 dollars a tonne in the first quarter of 2017 and has declined to about 1,400 dollar tonne by January 2018.
A coconut now retails around 75 to 80 dollars a nut.
Sri Lanka’s rupee however fell from 131 to155 to the US dollar during the period due to central bank loose policy and real effective exchange rate targeting, inflating all prices and worsening the effects of a drought. (Colombo/Feb24/2018)