Sri Lanka’s Coconut Crisis Descending to Chaos and Crushed Dreams

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Sri Lanka’s once-mighty coconut export game has gone from boom to bust and fast. Factories are under pressure to stay operating, workers are jobless, and the country’s precious nut is stuck in a stranglehold thanks to greedy middlemen, dodgy pricing, and a system that seems more asleep than awake. Welcome to the great Sri Lankan coconut crisis of 2025.

Here’s the nutty truth - coconut production has plunged, from 3.35 billion nuts in 2022 to just 2.68 billion last year. Why? Because no one’s replanting, trees are aging, and the country’s getting roasted by climate stress. But that hasn’t stopped coconut dealers from hiking up prices for desiccated coconut (DC), lining their pockets while factories go under. Third-party traders are gobbling the margins, and now, entire export operations are grinding to a halt.

Source: PFN Archives - Sri Lankan Coconut farmer sitting on his pile of coconuts

And where are the supposed lifeguards? The Coconut Development Authority (CDA) and Coconut Research Institute (CRI) are either missing in action or tangled in red tape. No serious pricing regulation, no plan for rejuvenation, and absolutely no foresight on how this impacts the bigger economic picture, including foreign exchange, rural jobs, and food security. It’s not just an industry collapse; it’s an economic time bomb.

So, what now? Sitting around hoping for better weather or fewer squirrels (yes, the government’s actually counting squirrels to understand crop losses) won’t fix this.

Sri Lanka needs to ditch the commodity mindset and start adding value. Think coconut milk, virgin oil, activated charcoal, fibre mats, cosmetic oils and not just sacks of DC shipped overseas for someone else to profit from. Thailand and Indonesia have already cracked this code. Why hasn’t Sri Lanka?

There’s big money in niche coconut products, health-conscious consumer trends, and sustainable, traceable farming. Instead, the country is bleeding foreign exchange, losing jobs, and watching its iconic industry get hollowed out like a sun-dried husk.

And let’s talk food. There’s massive untapped potential in coconut-based ready meals, like shelf-stable Sri Lankan curries with coconut milk bases, instant coconut sambol blends, coconut butter spreads, plant-based coconut ‘meat’ substitutes, and even high-protein coconut bars made from dehydrated coconut meat and natural sweeteners. How about coconut-based baby food, vegan condensed milk, or export-grade coconut biscuits? These are products global consumers want and Sri Lanka should be making them, branding them, and shipping them straight to supermarkets and online stores abroad.

Source: PFN Ai Archives - A selection of 'value-add' coconut products

If Sri Lanka’s coconut sector wants to bounce back, it has to stop thinking in kilos and start thinking in SKUs. Not just bulk commodities, but branded, finished, high-margin products telling a story, meet global health trends, and keep value right where it belongs, in the country.

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