Sri Lankan Drought Still Impacting Yields

Sri Lanka is experiencing its worst droughts in nearly 40 years. According to agronomists, and weather services organizations on the ground, the after effects of the drought are still being felt today. 

With 2016 rainfall levels just a third of what was captured in 2015, and with the country's main reservoirs at lower than normal levels, many facets of Sri Lankan life have been affected, from energy, human services, and agricultural production across almost all region in Sri Lanka. 

Coconut nut prices, which hovered around ~55 rupees/kilo for the last few years, have dramatically risen in price, nearly doubling in price to ~90 rupees/kilo since the worst of the drought. This has translated to double digit % increases in price to the consumer.

This news strikes a blow to the American market. Over the last year, consumers have become keenly aware that the quality and consistency of Sri Lankan coconut products matches, if not exceeds, the same parameters found of Filipino products. 

Though this situation has caused hardship for many farmers and producers of coconut products, producers see this as another setback to overcome. One farmer remarked that "these events occur every 6-8 years" and that although nut prices may not recover to pre-drought levels, the situation will likely stabilize in the next couple of months. 

As the Sri Lankan situation recovers, American consumers and end users of coconut products should expect higher prices from Sri Lanka, followed by a recovery and a return to relative normalcy by summer. 


Frederic Zhang