Regular coconut auctions abandoned until next year

• COVID-19 second wave and soaring farm gate prices cited as key reasons 
• Regular weekly auctions have been abandoned since Sept. 24

By Nishel Fernando 
Sri Lanka’s Coconut Development Authority (CDA) has abandoned its regular coconut auctions since late September, amid the second wave of the COVID-19 virus and soaring farm gate prices of coconuts, due to shortages. 

The CDA conducts weekly auctions in Colombo and bimonthly auctions in Kuliyapitiya. Further, it commenced online auctions from April this year, amid the COVID-19 outbreak in the country. However, the CDA has abandoned its weekly regular auctions since September 24.

The market participants said there were few online auctions since September 24, on an irregular basis. However, the CDA hasn’t updated the outcomes of these auctions on its officials website. 

Speaking to Mirror Business, Coconut Growers Association of Sri Lanka (CGASL) President Jayantha B. Samarakoon cited the second wave of the COVID-19 outbreak and high farm gate prices of coconuts as key reasons for the development. 

The current high prices are a result of high demand combined with low harvest, due to unfavourable weather.
The coconut industry has seen fairly large orders with the COVID-19 pandemic, specially for coconut milk in the export sector.

During the 10 months of the year, the export volumes of coconut cream and milk have jumped by 39 percent and 26 percent, respectively, compared to the same period, last year.

Further, Samarakoon noted that the domestic demand for coconut oil has also soared, due to the increase in import taxes. 

“With the recent tax adjustments, the palm oil prices are now equivalent to coconut oil prices, hence the local coconut oil industry restarted. During the past three to four years, there was a bad practice of mixing coconut oil with palm oil and selling as pure coconut oil,” he elaborated. 

As the farm gate prices are on an upward trajectory, the growers haven’t felt the need for regular auctions at the moment.  

“The farm gate price is also now going at R.60-65 per nut. Even we, as growers, are not complaining because the price is high. Typically, this time of the year, we sell coconut at Rs.40 per nut,” 
Samarakoon said.

However, he noted that the yield is almost halved, due to the unfavourable climate.

Meanwhile, the current retail prices of coconut have jumped above Rs.85 at major supermarkets and even higher in small retail stores above the maximum retail prices set by the Consumer Affairs Authority (CAA), in late September. 

As per the gazette notification issued by the CAA, the maximum price of a coconut with a circumference of more than 13 inches is set at Rs.70 and the maximum price of a coconut between 12 and 13 inches is set 
at Rs.65.

The CGASL expects the current shortage of coconuts to remain at least until end-January and regular coconut auctions to resume from the beginning of January, following the Christmas and New Year holiday break.