• Only a small portion of coconut products shipped to Middle East
• Overall direct impact on industry estimated at around 12–14%
• Indirect impact includes increased shipping costs

The ongoing Middle East crisis has had a limited direct impact on Sri Lanka’s coconut exports, although shipping disruptions and increasing freight costs have created operational challenges for the sector, according to Coconut Development Authority (CDA) Chairman Shantha Ranathunga. 

He explained that the direct impact on exports remained relatively low, noting that only a small portion of coconut products were shipped to the Middle East. 

According to Ranathunga, approximately 8% of coconut products are exported directly to the Dubai market, especially king coconut and related coconut products. As a result, the overall direct impact on the industry is estimated at around 12–14%.

Ranathunga further stated that while direct impact upon exports remained limited, indirect effects had emerged due to disruptions to shipping routes. 

He noted that the closure of certain routes and the inability of vessels to pass through Middle Eastern routes had forced ships to take longer alternative routes before reaching markets such as the UK and the US. As a result, shipping charges have increased notably.

“Freight costs have increased by between $ 1,500 and $ 4,000 per container for exports, and this surge has created additional pressure on exporters. The other challenge is shipment delays, with goods not being collected on time and some buyers slowing down shipments due to higher freight costs. While we can’t predict how the situation will unfold, we hope it will stabilise within the next few weeks,” Ranathunga said.

However, he emphasised that certain exports were continuing despite these disruptions.

Addressing imports related to value addition, the CDA Chairman stated that there was currently no significant impact. He explained that Sri Lanka did not import products for value addition at present, apart from coconut oil.

He further noted that, in certain cases, approvals were granted for specific consumers under the Temporary Import for Export Processing (TIEP) scheme, specifically for products that could not be manufactured locally. These include items such as coconut sugar and concentrated coconut water.

Ranathunga clarified that these products were imported only for value addition and were subsequently re-exported. He added that all products imported under this scheme were processed and exported accordingly, ensuring that imports were tied directly to export-oriented value addition activities.