Sri Lanka’s once-resilient coconut industry is confronting one of its most difficult periods in decades, as production continues to fall and a fast-spreading leaf blight disease threatens plantations across key growing regions. Despite official optimism for a rebound in 2026 with the Coconut Cultivation Board (CCB) setting an ambitious target of 4.2 billion nuts—current data and field conditions suggest that the industry is under severe strain.
Central Bank figures for the first ten months of 2025 show the scale of the crisis. Coconut production declined to 1.92 billion nuts as of August 2025, a 4.8% drop compared to the same period last year. Farmers report lower yields, while exporters are under pressure as supply shortages grow more visible.
Paradoxically, export income surged 35% year-on-year to US$367.5 million, driven largely by higher international prices for desiccated coconut, coconut oil, and fibre-based products. This increase has masked the seriousness of the domestic supply decline, but industry analysts warn that continued production losses could eventually drag down export performance as well.
Prices in the local market reflect the tight supply. The average gross price of a coconut rose 53% to Rs. 138.25 by August 2025, placing pressure on households and domestic industries that rely heavily on coconuts for food manufacturing, cosmetics, and oil extraction.
CCB Chairman Dr. Sunimal Jayakody acknowledges that while Treasury funding for plantations has improved, several structural challenges remain. One of the most serious is leaf blight, a disease for which there is currently no effective treatment. The only available mitigation strategy is cutting and removing infected portions to prevent further spread. The disease has now been reported in Weligama, Matara, Galle, and Hambantota, raising alarms among cultivators and prompting rapid-response efforts by the CCB.
Agricultural experts warn that if the spread is not contained, Sri Lanka could face a long-term production slump that will affect both domestic supply—currently accounting for around 70% of annual output—and the export sector, which already faces a significant raw material shortage.
In his 2026 Budget speech, President Anura Kumara Dissanayake acknowledged the widening supply gap and announced new measures to boost long-term output. Sri Lanka typically produces 2.8 to 3 billion coconuts annually, but demand from households and industries has outpaced supply for years. To address this, the Government has allocated Rs. 600 million to expand cultivation in the Northern Coconut Triangle, backed by recommendations from the Coconut Research Institute.
However, one of the persistent challenges is the productivity gap between commercial growers and smallholders. Large estates use modern irrigation, fertiliser application, and moisture-retention techniques, but thousands of smallholders most owning less than five acres—struggle to adopt the same practices. The CCB’s mulching program has so far covered only 4,000 acres, a fraction of the estimated 447,000 acres under coconut nationwide.
To close the gap, the Government has proposed a Rs. 2.5 billion structured incentive program targeting smallholders, aiming to improve yields, strengthen disease-management capacity, and stabilise supply for exporters.
As 2025 draws to a close, the industry stands at a critical juncture. Without effective disease control and rapid intervention to raise productivity, Sri Lanka’s coconut sector—an essential agricultural pillar—could face deeper challenges in the years ahead.
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