In a recent move to help “make the country free from oil palm plantation and palm oil consumption”1, Sri Lanka banned imports of palm oils and new palm plantations last month. In addition, existing producers will need to begin the process of uprooting their plantations.
The move had a ripple effect on the coconut market. In lieu of palm oil, the domestic demand for Sri Lanka’s coconut oil has increased exponentially, and suppliers are having a hard time keeping up. Many producers have already had to close down due to increased Covid outbreaks. This unexpected demand for coconut oil has caused some of these producers to go off market while they examine the full scope of the impact.
The coconut supply chain in general was already taxed due to the widespread shortage of empty shipping containers, Covid-19 closures, and the storms that impacted some of the top coconut producing regions. Consequently, prices for coconut products across the board have gotten higher and lead times have increased tremendously. These factors are expected to affect consumers of coconut products for the remainder of 2021 and possibly into 2022 as well.
1Source: “Sri Lanka bans palm oil imports, tells producers to uproot plantations” by Reuters. Read the full article here.
