Cocoa powder and cake market in Sri Lanka

Earlier Report Observations

The market for cocoa powder and cake in Sri Lanka expanded from 3 175 tons in 2018 to 3 488 tons in 2020, driven by rising imports that offset declining domestic production. Regulatory developments began shaping the environment, with the Ministry of Health drafting new standards for cocoa-containing foods in 2019 to improve quality. The following year, the Food (Labelling and Advertising) Regulations 2020 mandated tri-language labeling, increasing packaging compliance costs for manufacturers and importers.

Market volume reached a peak of 3 753 tons in 2021, largely due to an unprecedented collapse in exports, which fell from over 1 500 tons to just 128 tons. Imports declined that year after the Consumer Affairs Authority imposed a CESS tax on imported confectionery and chocolate, raising their cost. In 2022, stricter rules under the Food (Labelling and Advertising) Regulations 2022 banned child-targeted mascots and required bold product names in three languages, adding further compliance burdens. The confectionery industry publicly questioned the feasibility of these nutritional labeling rules, highlighting challenges for small-scale producers. These measures coincided with a slight market contraction to 3 664 tons.

The market then fell sharply to 2 741 tons in 2023. Domestic production recovered modestly, but imports continued to drop, reaching 2 094 tons. The cumulative impact of the 2022 labeling framework, which remained in force, likely sustained pressure on market access and operational costs throughout the period.

Production cocoa powder and cake in Sri Lanka

In kind, 2017-2020, t

Top producers of cocoa powder and cake, 2017-2020

World map of production of cocoa powder and cake, 2017-2020

Sri Lanka's production of cocoa powder and cake has declined for the second year in a row. In 2020, the country produced 566.7 tonnes, representing a significant year-over-year decrease of 20.9%. Looking at the period from 2017 to 2020, production fell by 7.4%, which translates to an average annual decline of 2.5%. The highest production level was recorded in 2018 at 907.4 tonnes, marking a substantial increase of 48.3% that year. However, the most significant drop occurred in 2019, with a 21.0% decrease.

Annual dynamics of production in Sri Lanka in kind, 2017-2020, t

In value, 2017-2020, K $ US

The value of cocoa powder and cake production in Sri Lanka has also fallen for the second consecutive year. In 2020, output was valued at 1 021 thousand US dollars, reflecting a notable year-over-year decline of 13.1%. Over the 2017-2020 period, production value decreased by 20.5%, with a compound annual growth rate of -7.4%. The peak value was reached in 2018 at 1 633 thousand US dollars, which represented a 27.2% increase that year. The sharpest decline was seen in 2019, with a 28.1% drop.

Annual dynamics of production in Sri Lanka in value, 2017-2020, K $ US

Exports cocoa powder and cake from Sri Lanka

Exports in kind, t

Following two years of growth, Sri Lanka's export volume of cocoa powder and cake declined in 2020. The export volume totaled 1 513 tonnes, showing a sharp decrease of 27.0% compared to 2019. Over the 2017-2020 period, exports actually increased by 14.3%, averaging 4.6% growth per year. The highest export volume was recorded in 2019 at 2 071 tonnes, which marked a 26.0% increase that year.

Annual dynamics of product's exports from Sri Lanka in kind, 2017-2020, t

From 2017 to 2020, the export market structure was highly concentrated, with India accounting for 92.6% of Sri Lanka's total cocoa powder and cake exports by volume.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Sri Lanka in kind, 2017-2020

Exports in value, K $ US

After two years of gains, Sri Lanka's cocoa powder and cake exports in value terms declined in 2020. The country exported 2 725 thousand US dollars worth of cocoa powder and cake, representing a notable year-over-year decrease of 19.7%. The highest export value was recorded in 2019 at 3 395 thousand US dollars, which reflected a 14.7% increase that year.

Annual dynamics of product's exports from Sri Lanka in value, 2017-2020, K $ US

During the 2017-2020 period, India effectively dominated Sri Lanka's cocoa powder and cake exports in value terms, capturing 93.7% of the total export value.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Sri Lanka in value, 2017-2020

Imports cocoa powder and cake to Sri Lanka

Imports in kind, t

After two years of growth, Sri Lanka's imports of cocoa powder and cake by volume declined in 2020. Import volume totaled 4 434 tonnes, down 5.1% from the previous year. Over the 2017-2020 period, imports increased by 19.5%, averaging 6.1% growth per year. The highest import volume was recorded in 2019 at 4 671 tonnes, which represented a 19.4% increase that year.

Annual dynamics of product's imports to Sri Lanka in kind, 2017-2020, t

From 2017 to 2020, China, Malaysia, and Singapore consistently led Sri Lanka's cocoa powder and cake imports by volume. China accounted for 38.4% of imports, Malaysia for 29.4%, and Singapore for 19.2%. Together, these three countries represented 86.9% of total import volume.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Sri Lanka in kind, 2017-2020

Imports in value, K $ US

Sri Lanka's imports of cocoa powder and cake in value terms increased for the second consecutive year in 2020. Import value totaled 9 158 thousand US dollars, showing a modest year-over-year improvement of 3.5%. Over the 2017-2020 period, imports increased by 17.6%, averaging 5.6% growth per year. The lowest import value was recorded in 2018 at 6 792 thousand US dollars, which represented a 12.8% decline that year. The most significant increase occurred in 2019, with a 30.3% rise.

Annual dynamics of product's imports to Sri Lanka in value, 2017-2020, K $ US

During the 2017-2020 period, three main markets—Singapore, Malaysia, and China—together accounted for 85.5% of Sri Lanka's total cocoa powder and cake import value.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Sri Lanka in value, 2017-2020