Reforming Sri Lanka’s coconut auction system: Call to empower growers and restore fairness

SRI Lanka’s coconut industry stands as a cornerstone of the national economy deeply rooted in its cultural heritage, rural livelihoods, and food security.

- By Wing Commander Chanaka Fernando (Retd.)

Encompassing over 409,000 hectares and producing close to three billion coconuts annually, the sector provides essential employment, stabilises rural communities, and earns valuable foreign exchange. In 2024 alone, Sri Lanka generated $ 856 million from coconut and coconut-based exports, reaffirming its global leadership as the number one exporter of coconut milk, cream, and powder; second in coir products; and third in desiccated coconut.

However, beneath this international success lies a sobering reality: the very growers especially smallholders who form the backbone of this industry are being systematically marginalised by a flawed pricing mechanism. While export revenue saw a modest uptick in 2024, the longer-term trend tells a different story. Earnings have dropped steadily from § 836 million in 2021 to $ 817 million in 2022, and further down to $ 709 million in 2023. Though shifts in global demand have played a role, the root causes are domestic centred on inefficiencies and a deeply flawed auction system overseen by the Coconut Development Authority (CDA).

Broken auction mechanism