Sri Lanka can easily increase the forex earnings from Coconut by creating an exclusive brand name for coconut similar to Tea said Senior Lecturer/Chairman- Center for Advance Marketing, University of Kelaniya, Dr. Ajith P. Medis
He said that this will create better brand awareness for Sri Lanka coconut which in turn helps to increase the prices of current exports. “A new global identity for Sri Lanka coconut will also help to secure more ‘export orders’ he said.
Medis said that firstly a fund should be set up which should be jointly managed by the government and private sector. The funds for this fund could be channeled through the government and also the private sector and a CESS similar to tea exports and Tourism too could be done.
He however said that simultaneously a mega coconut tea plantation program too should be done to ‘up’ the local supply.
Following is a Q and A with Dr. Ajith Medis.
Q: How is the current coconut market in the world?
A: Global coconut market continues to grow over the last decades. The total exports indicated resilient growth from 2007 to 2018: its volume increased at an average annual rate of +7.3% over the last eleven years. The demand for two coconut products namely coconut water and Virgin Coconut oil has sky rocketed during the last decade mainly due to their recently discovered health benefits.
The countries with the highest volumes of coconut production in 2018 were Indonesia, the Philippines, and India, together accounting for 73% of global production. These countries were followed by Sri Lanka, Brazil, Viet Nam, Papua New Guinea, and Mexico, which together accounted for a further 15%.
Indonesia was the largest exporter of coconuts in the world and Thailand took the second position in the ranking, followed by Viet Nam. All these countries together held near a 23% share of total exports. The following exporters – Cote d’Ivoire, Malaysia, the Netherlands, Mexico, Guyana, and India – together made up 17% of total exports.
In 2018, around 671K tonnes of coconuts were imported worldwide; surging by 26% against the previous year. In general, coconut imports continue to indicate a resilient increase. Thailand and Malaysia were the largest importers of coconuts in 2018, reaching approx. 31% and 30% of total imports, respectively. China ranks next in terms of the total imports with a 9% share, followed by the U.S. (5.7%).
Q: Where is Sri Lanka in this market?
A: Sri Lankan agriculture sector has continuously performed as a key economic force in Sri Lanka, providing a significant contribution to the national economy. Sri Lanka exports a variety of agricultural products to the rest of the world.
Agriculture exports contributed 22% to the national exports in 2018. The principal crops are tea, rubber, coconut, and minor crops. The coconut sector is the third essential sector and one of the major plantation crops in Sri Lanka, which accounts for approximately 12% of all agricultural produce in Sri Lanka.
Sri Lanka has recorded a steady growth as an exporter and accounted for the fourth position as an overall coconut related product exporter in the world in 2018.
Q: Is Sri Lanka on the right path?
A: Individually, many companies have taken advantage of the increasing demand in the world market but I feel, the country needs a better approach to increase value-added products and especially developing brands.
We should make sure not to allow what took place to the Ceylon Tea brand in the past where multinationals capitalized our true name and enjoyed larger profits whereas we fought with prices.
It is important to develop brands rather exporting coconut as a generic product as Dilmaha has done to tea. Otherwise, developed countries take higher profits from our products and we will fight for the lowest price with other exporters.
Some companies in Sri Lanka like NMK Holdings, Hayleys, etc. have established its own identity in the world but needs more work to be done with the support of the Government. The Government should play a more supporting and a vital role in terms of not just increasing the volume of coconut related exports, but deliberately supporting private companies to develop and establish more and more brands globally.
Q: What are the local trends in the market?
A: In terms of the local market, a lot of standards have been put in place but what I observe are poor awareness programs and monitoring mechanisms.
It is sad and hard for an ordinary consumer to buy good coconut oil for their day to day consumption. Even in the bottled market, the product is misleading like selling coconut oil based on color and aroma.
Q: What should be the role of the new government towards the development of the coconut industry?
A: The government should play a large role in educating and implementing many things in order to make sure that the Sri Lankan consumer gets quality oil at the end of the day.
The Ministry of Coconut development should also look at creating hybrid coconut plants and look at new areas outside the traditional coconut triangle to grow coconut.
Increasing of subsidy for new plantations and also existing plantations too should be increased to entice more plants being grown.
Another area that should be perused to increase coconut revenue is to have more local base value addition, especially in coconut fiber.
Seeking foreign expertise as well as the assistance of Coconut Institutes and Universities in this regard too should be done.
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