Sri Lanka Government Acts on Coconut Price Surge amid Supply Crisis

The Sri Lankan government is set to implement immediate measures to stabilize coconut and coconut oil prices, which have soared due to supply shortages and high domestic demand, according to the Agriculture Ministry, reported in Lanka News Web, Colombo, on November 28. A senior official highlighted the urgency, noting the ongoing challenge of meeting local coconut demand.
Sri Lanka consumes 10,000 metric tons of edible oil monthly, but local production has halved to just 4,000–5,000 metric tons due to economic challenges and reduced purchasing power. Of the 240,000 metric tons of coconut oil consumed annually, only 40,000 tons are locally produced, with the rest supplemented by substitutes. Locally, wholesale coconut oil prices have jumped from Rs. 630 to Rs. 700 per kilogram, with retail prices reaching Rs. 1,350 per liter. These increases have forced the market to turn to cheaper imported oils. 
In response, the government is considering easing palm oil import restrictions, introduced in 2022, to reduce the financial burden. Currently, coconut oil imports cost Sri Lanka approximately $3.5 million monthly, a figure that could be cut substantially if restrictions are lifted. Local refiners favor crude palm oil imports, while distributors prefer refined varieties. Meeting demand through imports could stabilize coconut oil prices and boost government revenue under the existing tariff structure, the Lanka News  Web wrote.