COMMODITIES 

COCONUT 

Trends in Production and Export 

Sri Lanka's coconut crop in 1977 
is expected to be one of the lowest in 
recent history. Tin Coconut Market­
ing Board in its Annual Review of 
Coconut Products for 1976 has stated 
that the adverse weather should con­
tinue to affect the coconut crop in 
1977 and a marked decline in the 
crop is expected particularly during 
January-April 1977 and for the year 
as a whole the crop is estimated to be 
b:low 2000 million nuts, which is one 
of the lowest crops in recent history. 
Th: review, points out that coconut 
production in Sri Lanka in 1976 is 
estimated at 2330 million coconuts 
compared with 258$ million in 1975. 
This represents a decline of 25 5 
million nuts or nearly 10% in re­
lation to 1975. Th; decline in the 
crop was primarily a result of adverse 
weather conditions and the shortfall 
in the crop was most prominent in 
the months of May - June and Octo­
ber-December of 1976. 

The export surplus (in the form of 
fresh nuts, copra, coconut oil, desic­
cated coconut) in 1976 amounted to 
794 million nut equivalents repre­
senting some 34% of the total crop. 
The export surplus in 1976 was lower 
than in 1975 by some 120 million nut 
equivalents or about 13%. Table I 
gives further details. 

Table I 
Estimated Export Export 
Cotonut Crop Surplus Surplus 

as % ojtbt 
Crop 

Yiar Million Nuts 
1970 2445 887 36.J 
1971 2668 I I O 9 41.6 
197 2 1818 I 2 3 I 43-7 
'97J . 1946 3$* 18.0 
1974 ZOJO 49J 24.4 
1975 2J8J 914 3J-4 
1976 I 3 3 O 794 34.1 

Domestic consumption in the form 
of fresh nuts (food nuts) absorbed 
53% of the coconut production in 
1976. Calculated on the basis of an 
annual per capita . consumption of 
90 coconuts, the total domestic con­
sumption of fresh nuts in 1976 
amounted to 1236 million nuts, an 
increase of 12 million from the corres­
ponding level in 1975. Copra Pro-

at Rs. 388 million recorded a drop of 
Rs. 18 million or 4.5% in relation to 
197; earnings, 

duction in 1976 is estimated at 
151,382 metric tonnes which repre- Desiccated coconut production in 
sented a drop of over 50,000 MT or 1976 amounted to 46,186 MT which 
2 5 % from the previous year's level, represents a decline of nearly j 3 96 MT 
Copra production absorbed about or 11% from the previous years. 
33% of the coconut crop in 1976. level. Desiccated coconut absorbed 

Table II 
EXPORT V A L U E OF C O C O N U T PRODUCTS 

(Rs. Millions) 

Product 

Coconut Oil ... 
Desiccated Coconut 
Fresh Nuts ... 

1975 %0/Total 1976 %0/Total 

219.0 43-3 191.6 37-9 
172.2 34.0 182.1 3J-9 

9-i 1.8 7.8 M 

Sub Total: Kernel Products 406.4 80.0 388.3 76.6 

Coir Fibre Products 
Coconut Shell Products ... 
Coconut Ekel • 

84.5 
11.9 
1-5 

l6 . 7 

2.4 
0.3 

100.5 
13.2 
4-4 

19.8 
2.6 
0.9 

Sub Total: By-products ... 97-9 19.4 118.1 *3-3 

TOTAL: ALL PRODUCTS J05-3 100.0 506.6 100.0 

The production and export of by­
products (coir fibre, coconut shell 
products and coconut ekel) showed a 
considerable improvement from the 
previous year's levels. The coir fibre 
production is estimated at 106,500 MT 
representing an improvement of 
28,400 MT or 36% from the 1975 
level. Coconut shell charcoal pro­
duction is estimated at 32,500 MT, 
an increase of 8500 MT or 35% in 
relation to the 1975 level. Coconut 
ekel exports were 5883 MT as against 
2079 MT in 1975, an increase of over 
180%. 

As seen in Table II above the 
total value (f.o.b.) of all coconut 
product exports amounted to 
Rs. 507 million in 1976 as against 
Rs. 505 million in 1975. Kernel 
product exports (fresh nuts, copra, 
oil and DC) accounted for 77% of the 
total export earnings as against 80% 
in 1975. The largest single contri­
bution came from coconut oil with 
38% of the total closely followed by 
DC with a share of 36%. Coir Pro­
ducts contributed nearly 20% of the 
total export value. The export earn­
ings from coconut by-products 
amounted to Rs. 118 million which re­
presented an increase of Rs. 20 million 
or over 20% in relation to previous 
year's earnings. In contrast, the ex­
port earnings from kernel products 

13% of the coconut production dur­
ing the year. 

TEA 

Prospects of Further Upward 
Movement in Prices 

Attractive advances in prices of all 
grades of tea have been recorded at 
each successive auction during the 
opening two months of this year. 
This trend has in fact been noted in 
all auction centres in the world. As a 
leading Colombo broker states: "The 
most popuhr question in the trade 
today is 'When is there going to be a 
cheek in this persistently upward swing 
in prices}'. A very difficult question 
indeed to answer but at the moment 
there is no evidence that points to­
wards this in the near future. Tea 
continues to be the cheapest beverage 
and as in so many other countries, the 
U.K.'s most popular retail packet is 
now around 20 p. per 1/4 lb. while 
the same weight of instant coffee is 
between 90P and ioop. Further in­
creases are an immediate prospect for 
both commodities but the reasons for 
drinking tea are becoming more 
forceful. World supplies in 1976 
increased by 17 million kilogrammes 
of which 15 million kilogrammes was 
taken up by India for internal con­
sumption. Internal consumption in 

E C O N O M I C R E V I E W , FEBRUARY 1 9 7 7 17 



1 . 

India is expected to show a further 
rise in the current year. There is no 
immediate prospect therefore of ex­
port supplies meeting with the con­
tinued increase in world consumption 
and we are happily confident that we 
will not see prices again similar to 
those of a few months ago. On the 
contrary, all indications are that 
there is every prospect of further 
price increases". 

Sri Lanka teas sold at the London 
auctions on February 21, registered 
substantial price increases ranging 
from 10 p to 20 p per kilo. Brokers' 
forecast that "perhaps, with these 
fantastic price increases in London, 
coupled with the very limited offer­
ings in Calcutta, local auction prices 
could well move up further". 

Tea prices in London are reported 
to have moved up by approximately 
300% during.the past year and the 
basic reason for this is that the forces 
of supply and demand have begun to 
work in favour of the producers. 
Stocks in London have been extreme­
ly low and at the end of December 
1976 the figure stood at only 20,450 
tons as against the normal average 
of 23,000 to 25,000 tons. 

It is a common belief that the 
world consumption of tea has in­
creased considerably, at a quicker pace 
than during the past so many' years. 
It is also believed that there will be 
only limited quantities available for 
disposal at main auction centres of 
the world for.the next few months. 

' These factors will play a very impor­
tant part in the world price for tea 
and everything points to a further 
upward movement in price for this 
commodity. It is hoped that pro­
duction, which does not appear to 
have increased over that of January 
and February in 1976, will pick up in 
Sri Lanka from about April onwards; 
for unless crop increases are forth­
coming Sri L^nka will not be able to 
take full advantage of the upward 
price spiral. 

R U B B E R 
Heavy arrivals at auctions 

During February there were continued 
heavy arrivals of crepe and sheet at the public 
auctions. Values were thus marked down 
with the easier conditions. Slack overseas 
markets aggravated the situation. Buying 
was very selective and defective crepes 
met with very poor demand. 

The extreme drought conditions experi­
enced during the January/February months 
had affected the production of qualtiy 
rubber. 

18 E C O N O M I C R E V I E W , FEBRUARY 1977