Coconut, palm kernel or babassu oil and fractions market in Sri Lanka

Earlier Report Observations

The market for not chemically modified coconut, palm kernel, and babassu oil in Sri Lanka expanded from $173.1 million in 2018 to $286.8 million in 2021. Initial government limits on oil palm cultivation aimed to protect the coconut sector, while the 2019 outbreak of Weligama Wilt disease threatened coconut oil production. In 2020, an announced ban on palm oil imports and cultivation, coupled with continued licensing for imports, kept import volumes high as the country relied heavily on foreign edible oils. The import ban was formally imposed in April 2021 but was quickly modified to allow non-chemically modified palm oil under special license, contributing to a surge in imports to $177.5 million that year.

Market volume stabilized at $281.5 million in 2022 as high taxes on locally refined edible oils, including a 2.5% Social Security Contribution Levy from October, took effect. Concurrent restrictions on oil palm cultivation and imports caused imports to fall sharply to $24.8 million, while domestic production rose to $335.8 million. A sharp contraction followed in 2023, with the market falling to $191.2 million. Production dropped to $141.8 million amid ongoing policy uncertainty, and although imports recovered to $117.5 million, they could not offset the decline, reflecting the continued impact of import bans and tax pressures on the industry.

In 2024, the government introduced an additional 18% Value Added Tax on locally refined edible oils, further increasing the tax burden on domestic processors. Simultaneously, bilateral talks with Indonesia raised the possibility of lifting the long-standing palm oil ban, though no final decision was reached, maintaining uncertainty for market participants.

Production coconut, palm kernel or babassu oil and fractions in Sri Lanka

In kind, 2017-2020, t

Between 2017 and 2020, Sri Lanka ranked as the 16th largest global producer of coconut, palm kernel, or babassu oil and fractions.

Top producers of coconut, palm kernel or babassu oil and fractions, 2017-2020

World map of production of coconut, palm kernel or babassu oil and fractions, 2017-2020

In 2020, Sri Lanka produced 53,600 tonnes of coconut, palm kernel, or babassu oil and fractions, representing a 16.9% decrease from the previous year. Over the 2017-2020 period, production declined by 2.9%, with an average annual decrease of 1.0%. The highest production level was recorded in 2019 at 64,500 tonnes, which also saw the largest annual increase of 16.8%.

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

In value, 2017-2020, M $ US

Sri Lanka's production of coconut, palm kernel, or babassu oil and fractions declined for the third consecutive year in 2020. The output was valued at 212.9 million US dollars, a 10.9% drop from 2019. From 2017 to 2020, production decreased by 17.9%, equivalent to an average annual decline of 6.3%.

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

Exports coconut, palm kernel or babassu oil and fractions from Sri Lanka

Exports in kind, t

In 2020, Sri Lanka exported 21,359 tonnes of coconut, palm kernel, or babassu oil and fractions, a sharp 30.1% increase from the previous year. Over the 2017-2020 period, exports grew by 6.1%, with an average annual growth rate of 2.0%. The lowest export volume was recorded in 2019 at 16,420 tonnes, which also experienced the largest decline of 20.1%.

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

From 2017 to 2020, the United States, Germany, and Australia were the top destinations for Sri Lanka's exports of coconut, palm kernel, or babassu oil and fractions in volume terms. The United States accounted for 24.8% of exports, Germany for 16.2%, and Australia for 11.6%, together making up 52.6% of total export flows.

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 decline, Sri Lanka's exports of coconut, palm kernel, or babassu oil and fractions rebounded in 2020. The export value reached 84.844 million US dollars, a significant 39.4% increase from 2019. However, over the 2017-2020 period, exports decreased by 10.2%, with an average annual decline of 3.5%. The lowest value was recorded in 2019 at 60.860 million US dollars, which saw the largest drop of 35.0%.

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

Between 2017 and 2020, the United States, Germany, and Australia were the leading markets for Sri Lanka's exports of coconut, palm kernel, or babassu oil and fractions in value terms. The United States contributed 24.4% of export value, Germany 16.1%, and Australia 12.4%, collectively accounting for 52.8% of total export flows.

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 coconut, palm kernel or babassu oil and fractions to Sri Lanka

Imports in kind, t

Import volumes showed significant volatility from 2017 to 2020. In 2019, imports hit their lowest point at 4,628 tonnes, with a 57.8% decline that year. By 2020, imports surged to 79,060 tonnes, a dramatic 1,608.4% increase year-over-year, marking a 17-fold difference between the two years.

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

During the 2017-2020 period, Indonesia and Malaysia dominated Sri Lanka's imports of coconut, palm kernel, or babassu oil and fractions in volume terms. Indonesia accounted for 54.6% of total imports, Malaysia for 29.2%, and together they made up 83.8% of import flows, with other partners contributing the remainder.

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

Import values exhibited high volatility from 2017 to 2020. In 2019, imports reached their minimum at 4.674 million US dollars, with a 69.1% decline that year. By 2020, imports jumped to 90.384 million US dollars, a substantial 1,833.8% increase year-over-year, representing a 19-fold shift between the two years.

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

From 2017 to 2020, Indonesia and Malaysia were the primary sources for Sri Lanka's imports of coconut, palm kernel, or babassu oil and fractions in value terms. Together, they accounted for 80.3% of total import flows, with other partners making up the rest.

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

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