Y%S ,xld fmd,a j.dlrejkaf.a ix.uh - The Coconut Growers ...

Coconut Growers Association of Sri Lanka
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                                Website: lankacoconutgrowers.com

          3rd Quarterly Bulletin for the Year 2019-2020

Mr. Jayantha Wickrakasinghe new Head of Lankan Coconut Sector
        Mr. Jayantha Wickranasinghe assumed duties as the new Chairman of the Coconut
Cultivation Board, Coconut Development Authority, Coconut Research Institute and the
Kapruka Fund Management Board on December 31, 2019 at the Head office of the Coconut
Cultivation Board.
        General Manager Mr. Dammika Ranathunga and other Executive Officers of the
Coconut Cultivation Board were present on this occasion.
        The newly appointed Chairman of the four Institutions of the Coconut Sector, Mr.
Jayantha Wickramasinghe was the Chief Executive Officer of Lanka Logistics and
Technologies Limited, Ministry of Defense and Urban Development from 2006 to 2015.
        He was a Member of the Board of Management of the Urban Development Authority
from 2010 to 2015, during which time Sri Lanka experienced mammoth progress and
investments in Urban Development.
        He was also a Director of the Information and Communication Technology Agencey
(ICTA) of Sri Lanka from 2003 to 2006.
        Mr. Jayantha Wickramasinghe is a Non­Exceutive Director of Ceylinco Life Insurance
Ltd., having the largest portfolio of Life Insurance business in the country. Further, Jayantha
Wickramasinghe was a past President of the Sri Lanka Canada Business Council. He was also
the Secretary of the Coconut Growers Association of Sri Lanka.
        He is a Chartered Member of the Chartered Institute of Logistics and Transport, UK.

       Strategic Plan to Develop the Coconut Industry of Sri Lanka by
2025
        The Coconut Growers Association of Sri Lanka (CGASL) has been participating in a
series of meetings commencing in 2019 with other stake holders in the industry to
formulate a Strategic Plan to have a robust Coconut Industry with all stake holders
participating and benefitting from Marco and Micro polices to be adopted by all stake
holders.
The following stake holders have participated at these deliberations.
    1. Coconut Growers Association of Sri Lanka
    2. Ceylon Desiccated Manufactures Association
    3. Oil Millers Association
    4. Virgin Coconut Oil Exporters Association
    5. Exporter Association of Coconut Based Substrates
    6. Fiber Millers Association
    7. Fiber Exporters Association

      As a outcome to these deliberation A document “ Way Forward – Stratergy for the
Coconut Industry of Sri Lanka has being compiled by the Colombo School of Business &
Management and presented to the stake holders.
                                              -1-

There are 8 main strategic focus areas.
         1. Maximizing the productivity of existing plantations
         2. Establish an efficient, cost effective collection system and supply chain between
Grower and end user (consumer / manufacture) to have sustainable Farm Gate price.
         3. Consistently improve the quality of market, production and business feasibility
information to enable stakeholders to effectively plan for sector diversification,
productivity improvement and development
         4. Focus on product and market diversification
         5. Develop finance mechanisms to enable strategy implementation and
investment by all stakeholders.
         6. Develop a coconut processing industry for value added and diversification of
coconut products.
         7. Improve support services to respond to sector needs.
         8. Establish a coconut strategy implementation and coordination body to establish
appropriate administrative and regulatory frameworks to manage the coconut Industry.
         This Strategic Plan was presented to the Minister of Agriculture Minister and the
Secretary on 20th December 2019 and both of them endorse same and requested the
stake holders to proceed with implementation of PLAN.
         The key highlight of the strategic framework is the establishment of a Joint
Coconut Industry Chamber (JCIC) which will serve as a joint industry secretariat to
facilitate the industry­wide corporation with consultation and support from government
establishments. Thus this represents a coordinated central point for the Industry.
         The CGASL committee members have contributed their valuable time and
resources in participating at stake holder meetings both in Colombo and Pannala. All the
stakeholder associations have financially contributed to meet the cost of preparing this
document. CGASL's share for same was Rs 250,000/­. Each stakeholder association is
entitled to nominate representatives to form the Joint Coconut Industry Chamber (JCIC).
Presently a constitution and other statutory document are being drafted for the
formation of JCIC.
CGASL nominations are
      1.       Mr. Cryshantha Jayawardhana (Vice President)
      2.       Mr. Lionel Fonseka (Immediate Past President)
      3.       Mr. Denzil Aponso (Past President)
      4.       Mr. Nimal Samarakkody (Past President)

       Meeting minutes Joint Coconut Industry Forum held on 27th
                               April 2020
Present :       M/S S. Ratnatunga, Chrishantha Fernadopulle, Lakshman, Ranjith
Pathiraja, Akila Fernando, Asitha Gunasekera, Chrysantha Jayawardena, Randolph,
Suresh Silva, Jayantha Samarakoon, Ranil Seneviratne, ,Gamini Malwanegedera,
Murthazar Lukmankee, Saman Indrajith, Kithsiri Palihawadana, Lalitha Ratnayake, Dayan
Fernando, Shantha Ranathunga, Natarajan, Indika Fernando, Asanka Herath, Suresh
Fernando, Lionel Fonseka, Lal Fernando, Dinesh Fernando

   Mr. Dinesh Fernando explained the purpose for this meeting was to get all the
    stakeholder associations of the coconut industry get involved as one voice so that all
    decisions in future will be of mutual benefit to all.
                                             -2-

   Mr. Dinesh also stressed that there were certain policy decisions that were going to
    be made by CDA/Ministry which will use this type of forum to discuss and notify.
   Mr. Suresh Silva stressed that the coconut industry was one of the very few industries
    with a full order book. Hence it will be one of the industries which could be used for
    the inflow of foreign currency into the country. Therefore, it is imperative that the
    CDA and the government pay heed to the concerns faced by the industry and take
    decisions so that the industry will be able to thrive in this difficult global
    environment.
   Mr. Suresh Silva also stressed that the implementation of the duty on imported edible
    oils has created a negative impact in the industry by driving the price of raw material
    (Coconut) up. He said that his company has reduced the working days from 5 to 2
    days per week due to this issue.
   Nut prices have gone up from LKR 70­73 per kg to LKR 85­90 per Kg as of last week.
   Our competition from Indonesia and Philippines remains at LKR 22 per kg.
   As a result of the inflation of coconut prices the export Industry for coconut is getting
    crippled.
   Mr. Samarakoon added that in order to be sustainable and profitable the growers nee
    to receive a price between LKR 60 ­ 70 per kg.
   Mr. Murtaza Lukmanjee stated that if the coconut prices can be stabilized between
    LKR 30 ­ 40 per nut and maintain an average of LKR 35 per nut that the Industry could
    be competitive in the global market.
   He also stressed that at the present prices the exporters will have to default on
    orders which have been forward booked as the prices negotiated cannot be
    maintained due to the abnormal increase of coconut prices.
   Mr. Ratnatunga stated that the oil millers are operating very efficiently since the
    prices received for their oil is at a very good level.
   The increase in the duty for edible oils has also impacted their market in a very
    positive manner.
   He also stated that there was no need to be alarmed as there is plenty of coconut
    available. However, the constraint is to get it to the manufacturing facilities due to
    the prevailing curfew and transport restrictions.
   He also stated that the oil imported into the country for refining purposes is of a very
    low quality and it is not fit for human consumption.
   Mr. Lalitha said that the quality of the oil imported should be left to the authorities to
    investigate test and decide if it is suitable or not and that individuals' opinions should
    not be the deciding factor. Mr. Suresh Fernando endorsed what Mr. Lalitha said.
   Mr. Shantha also re­affirmed that the nut prices should be in the range of LKR 70 per
    kg for the export market to be sustainable.
   Mr. Chrysantha stated that the growers received a nut price between LKR 25­27 per
    nut last year. He said that it was not a sustainable price as far as the growers are
    concerned.
   Mr. Dinesh Fernando said that it would be in everyone's interest if the coconut prices
    are stabilized at LKR 35­40 per nut.
   He also said that the Ministry is trying to reduce the duty of imported coconut oil by
    LKR 50 per kg. And also to stop or minimize the import of palm oil into the country.
   Mr. Ratnatunga was against this idea as it will be detrimental to the oil millers. They
    will not be able to remain competitive with imported coconut oil prices if the duty is
    reduced as suggested.
   Mr. Dinesh Fernando said that the flip side of the coin would be that the coconut
    exporters will be facing factors beyond their control and that the export revenue
    generated from the coconut Industry will definitely suffer at a time country needs it
    most.
   Mr. Ratnatunga stated that if the coconut prices are maintained at LKR 35­40 per nut
    that they could supply Coconut oil at LKR 350­375 per kg.
   Mr. Murtaza Lukmanjee stated that in order to remain competitive across all stake
                                             -3-

holders that the coconut prices should be maintained at LKR35­40 per coconut and
    the coconut oil should be sold at LKR 350/kg base on the above price. He also stated
    that the duty on imported coconut oil should be brought down to LKR120 and palm
    oil duty should remain at LKT 170/kg
   Mr. Suresh Fernando also mentioned that a price difference of LKR35,000 per ton
    should be maintained between crude and refined oil.
   Mr. Lalitha Ratnayake mentioned that consideration should be given to the refinery
    facilities that are available in the country. Taking into consideration the investment
    into such facilities and the employment generated through such facilities..
   A general belief was that the duty structure on edible oils should be reviewed
    quarterly taking into consideration the voice across all the stake holder associations
    (Joint Coconut Industry Association Forum).
   Mr. Suresh Fernando also stated that the palm oil prices should be maintained at the
    higher level as if the prices are reduced some unscrupulous manufacturers mix palm
    oil with coconut oil in order to maximum profits. This creates a negative image for the
    product produced in Sri Lanka which is considered to be of a superior quality.
   Mr. Chrysantha said that we should start discussing coconut prices on a per Kg basis
    and not per nut basis. This is because the entire industry buys coconut based on
    weight and not volume. Therefore based on this the per kg rate should be between
    LKR 70­80 per kg. This is the figure that the coconut growers find sustainable. Mr.
    Jayantha Samarakoon agreed to this as well.
   Mr. Murthazar stated that LKR70 per kg in times of abundant supply and LKR 80 per
    kg in time of short supply could be agreed to.
   Mr. Suresh Fernando said that the coconut pricing should be based on an average
    annual price and should be kept between LKR 65­80 in order for all stake holders to
    remain profitable and competitive.
   Mr. Pathiraja stated that
     If the price per kg of coconut was LKR 65 the price per Kg of Coconut oil of LKR
         375 could be given.
     If coconuts were LKR70 per kg the oil would be LKr 410 per kg' (Mill price)
     If coconuts were LKR75 per Kg the oil would be Lkr 435 per kg
     If the coconut were Lkr 80 per Kg the oil would be Lkr 465 per kg.
   A suggestion was made that to suggest to the CDA to give average prices for the
    commodities that are controlled under their purview. (ie. Price per kg of husked
    coconut, Price per kg of Oil etc…)
   A draft letter containing the points discussed will be done by Mr. Asitha Gunasekera
    and Mr. Suresh Fernando. This draft will be circulated and agreed upon. Thereafter
    once agreed it will be sent as an official document to the Treasury, Ministry and the
    CDA with the recommendations and proposals.
                                                          st
   It was noted and agreed by all that this was the 1 time that all stake holders have
    had such a successful meeting where all parties have agreed on common proposals
    and suggestions for the betterment of the industry in general.
   Mr. Chrysantha said that just as we have agreed on coconut and oil prices that we
    should agree on DC prices as well. However Mr. Murtaza Luckmanjee was of a
    different opinion as the market for DC from Sri Lanka has reduced by half although
    the world demand continues to increase. Countries such as Indonesia and Vietnam
    are capitalizing on this situation. He foresees a further reduction in future. Hence in a
    reducing and highly competitive market he does not think that the pricing formula for
    coconut based on DC will work.
   All sectors agreed to make a request from the treasury, the ministry and the CDA to
    consult The Joint Coconut Industry Forum before making changes to the Special
    Commodities Levy (SCL) in future.
   Non­Kernel Products
     Mr. Gamini stated that the main issue faced by the industry at present is on how
         to overcome the restrictions in place as a result of the present COVID­19
                                             -4-

situation to operate fibre and substrates at optimum capacity.
        He said that the MOH and the security forces do not identify fibre and substrates
         as an essential item. Hence it is difficult to carry on as usual.
        All present at the discussion were of the same opinion.
        Mr. Jayantha stated an interesting fact that the coconut growers predict a harvest
         in excess of what we received in 2019. However, the report submitted by the CRI
         disputes this fact by stating a crop reduction of between 5­8%
        Mr. Indika stated that their fibre mills are not operating as usual and that they
         are facing a bigger issue of selling the goods manufactured.
        Mr Chrysantha discussed the possibility Formalization of the incorporation of The
         Joint Coconut Industry Chamber as a corporate entity. In this regard it was
         suggested that option of different corporate structures be compared and merits
         /demerits be compared and the most suitable corporate structure be proposed
         at the next meeting for discussion

   A similar meeting was suggested to be held in 2 weeks time.
Summary of decisions taken at the above meeting:

       All sectors (Growers, Coconut Oil, Desiccated Coconut, Coconut Milk, Exporters)
        unanimously agreed that the farm gate coconut price should be Rs.35.00 – 40.00
        per nut.

       All sectors agreed that the coconut price should be quoted in Rs/Kg as opposed to
        Rs/nut. As such, coconut price of Rs.35 – 40 per nut should be quoted as Rs.65/Kg to
        Rs.80/kg husked and delivered to factories.

       All sectors agreed the coconut oil price should be Rs.375/Kg to Rs.425/Kg Ex
        factory. Palm oil would then tend to be a little lower than this.

       All sectors agreed in order to maintain an adequate supply of edible oil for the
        domestic market edible oil should be imported. Duty on imported edible oil should
        be decided by the CDA as per the agreed limitations (Coconut Price Rs.65/Kg­ 80/Kg
        and Coconut Oil Price Ex factory / Ex warehouse CMB price of Rs.375/Kg
        –Rs.425/Kg).

       The duty on both Coconut and Palm Oil to be adjusted accordingly such that both
        oils can be imported. The CDA after calculating the rate of duties to take immediate
        steps with the Treasury to allow importation of edible oils freely and share their
        recommendations with this Joint Coconut Industry Association Forum. All future
        decisions on duty changes to be made by the CDA/Plantation Ministry after
        consultation of the Joint Coconut Industry Association.

       JCIC to write to the Minister/Chairman CDA immediately, indicating above for
        prompt action to revise duties in order to stabilize the prices of coconut, for
        Industries to operate at commercial viability.

       All sectors agreed to meet after 14 days from today (27th April) to discuss the
        developments/follow up of the decisions taken at the meeting.

       Identify the most suitable corporate structure for the Joint Coconut Industry
        Association by comparing merits/demerits of various options at the next meeting.
                                             -5-

-6-

-7-

ARE YOU ALL STILL WITH PALM OIL OR CHANGED OVER TO
                            COCONUT OIL?
I think you can remember my previous article captioned “IS IT COCONUT OIL OR PALM
OIL?” I think it is an opportune time that I reiterate the same topic for the benefit of our
members.

                                          **********
                                 Is it Coconut oil or Palm Oil?
It is time that we did an analytical study of coconut oil and Palm oil; as there is a controversy
over the supremacy of the duet.
                            Biochemical Analysis of the two oils.

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                                                                        ‫ –ي‬1 2

Carbon Atoms – Fatty acids are basically made with Carbon, Hydrogen and Oxygen atoms.
The length of the molecule of the fatty acid is determined by the number is determined by
the number of Carbon atoms. Accordingly the fatty acids are catergorized in to long chain,
medium chain and short chain fatty acids. L
As indicated by the above chart coconut oil though saturated has mostly medium chain fatty
acids and palm oil though unsaturated has mostly long chain fatty acids. If we consider the
metabolism of the two oils, coconut oil is highly digestible and is readily absorbed due to its
high content of medium chain fatty acids and is taken via the portal system directly to the
liver without being circulated around the body in the circulatory system and is metabolized
by the liver into energy while utilizing the other benefits of it.
To the contrary palm oil with its high content of long chain fatty acids it is not easily digestible
and is converted into chylomicrons (large fatty molecules) in the intestine and is absorbed by
the lymphatics (a system of channels other than blood circulatory system) and is circulated
around the body and the fatty materials get deposited in the blood vessels forming
obstructive plaques more so in the damaged internal linings of the blood vessels by high
blood pressure, diabetes, smoking, obesity etc. When this obstruction occurs in the blood
vessels of vital organs like heart, brain, eyes, kidneys fatal eventualities could befall.
The other advantages of coconut oil are that it has anti carcinogenic (cancer making
tendency) , anti bacterial and anti fungal properties. Virgin coconut oil has an added
advantage of being an anti Alzheimer's nutrient. Coconut oil could be reused in cooking
owing to its low iodine value classifying it as a non drying oil.
Unfortunately the same could not be spoken of palm oil as it has a lot of disadvantages.
                                                -8-

It is not safe to be reused in cooking as the Esthers(chemical compounds) formed by
recurrent heating palm oil are carcinogenic. Palm oil is cholesterologenic and contributes a
lot to atherogenic(intra vascular) plaque formation in the circulatory system.
Taking these into consideration it is not advisable to use palm oil for consumption but could
be used in industry to make soaps etc.
With all the advantages of coconut oil and the awareness among the international
community there is a great worldwide consumer acceptance and has become a favored
delicacy.
Internationally coconut oil is vividly used in nutraceuticals (food materials),
lllpharmaceuticals and in cosmeceuticals.
As growers it is our duty to produce adequate quantities of coconuts to meet the ever rising
local and international demands.
                                          **********

Existence of coconut cultivation in Sri Lanka dates back to about 2000 years; though
systematic cultivation has commenced rather late.
Coconut kernel had been providing about 22% of the total calorie supply being only
second to rice. Average per capita annual consumption is about 120 nuts of which about
30 nuts been consumed as coconut oil.
Coconut oil had been used very widely in Sri Lanka till about a few decades ago when a
very negative publicity was given by the western world as a very health hazardous oil,
probably to market their own products. It took ground very well till proper bio chemical
analysis proved the real value of coconut oil as a health friendly commodity. In the mean
time palm oil had been imported to the country predominantly to be value added and re­
exported. Most unfortunately major part of this oil had leaked into the Sri Lankan
consumer market and is presently consumed in great volumes predominantly due to its
low cost when compared to coconut oil. Not only that many dealers used to adulterate
coconut oil with palm oil thereby reducing the market values to unrealistic low levels
rendering a lot of oil mills to closure.
Presently palm oil is enjoying a consumer market share of about 88% leaving coconut oil
to 12%.
The palm oil is marketed by the leading multinational companies as a vegetable oil
misleading the people. Some of the multinational companies market it as vegetable oil
derived by RBD Palm Olein. RBD means refined, bleeched and deorderized; none of which
is going to change the chemistry of Palm oil.
The money you save by paying less for palm oil on a long­term basis will have to be spent
on medicine and hospitalization. In the pre palm oil era where coconut oil was used as the
main edible oil the occurrence of heat attacks, strokes, blindness, kidney failure and
cancers was insignificant where as presently it is difficult to find a family where such
deceases are not found.
As remedial measures to save our nation it is best that we completely stop the
importation of palm oil and to import coconut oil to fill the void, the growers should be
given a proper farm gate price, the closed down oil mills (about 90%) to be
recommenced, to make available the other agro requirements like manure and other agro
chemicals and agro equipment at affordable prices and at the necessary times (specially
manure).
In the next bulletin I will be publishing an article where one could make coconut oil at the
level of a cottage industry.
Wishing you all a very healthy future,
 Dr. Nihal Silva.

                                             -9-

If undelivered,
Please return to :

J.V.R. Dias          To:
873, Negombo Road,
Mabole,
Wattala.

                           -10-