CCCI says US tariffs threaten $ 857 m coconut export industry

From left: Exporter Association of Coconut Based Substrates President Jayaruwan Samarathunga, Coconut Milk Manufacturers’ Association Lalitha Ratnayake, Ceylon Chamber of Coconut Industries President Jayantha Samarakoon, Ceylon Virgin Coconut Oil Manufacturers’ Association President Janaka Manchanayake, and Desiccated Coconut Manufacturers’ Association Secretary Jason Samaranayake

• Calls for urgent Govt. action, US engagement and tariff relief talks
• Says Sri Lanka loses price competitiveness against Philippines, Vietnam and India
• Opines move will affect over 800,000 livelihoods, including over 150,000 direct jobs in processing
• Export items at risk include; coconut oil, milk, desiccated coconut, coir and activated carbon
• Warns of FDI flight and investor pullback amid IMF reforms 
• Urges bilateral trade agreements and short-term export support

The Ceylon Chamber of Coconut Industries (CCCI) yesterday issued an urgent appeal to the Government in response to the US’ decision to impose a 30% import tariff on coconut-based products from Sri Lanka, effective 1 August. The move threatens to upend one of the country’s most valuable export sectors, which currently generates over $ 857 million in annual revenue, and risks pushing thousands of rural livelihoods into uncertainty.

The US is Sri Lanka’s single largest buyer of coconut-based products, accounting for more than 20% of the sector’s exports, valued at roughly $ 160 million each year. 

According to the CCCI, the new tariff all but destroys Sri Lanka’s price competitiveness in the US market. Competing suppliers such as the Philippines, Vietnam, and India enjoy preferential trade access, meaning Sri Lankan products, despite their globally renowned quality, will be sidelined on cost alone.

“This isn’t just a policy shift. It’s a devastating blow to an entire industry that Sri Lanka has worked hard to build,” said CCCI Chairman Jayantha Samarakoon. “Our products are recognised globally for their purity, taste, and nutritional value. But no matter how good they are, a 30% tariff makes them unaffordable for buyers. We will be priced out of the market—not because of quality, but because of cost. While we acknowledge the reduction from the originally proposed 44%, even at 30%, the impact remains deeply damaging to our export competitiveness and to the hundreds of thousands of rural livelihoods tied to this industry.”

In light of this, the Chamber is calling for urgent and coordinated Government action to safeguard the sector. It has urged immediate engagement with the Office of the US Trade Representative (USTR) to explore options for tariff relief or exemptions. 

The Chamber also called for a renewed push to secure bilateral trade agreements that ensure fair access to key markets, alongside targeted support to help exporters absorb short-term shocks and improve long-term competitiveness.

“This is no longer just an economic issue. It’s a national priority,” Samarakoon stressed. “If we allow this industry to fall through the cracks, we risk losing not only a major export earner, but a vital pillar of rural resilience, food security, and industrial growth. The time to act is now.”

The export basket at risk includes a wide range of value-added goods: desiccated coconut, virgin and refined coconut oil, coconut milk and cream, coconut water, coir fibre products, activated carbon, and husk-based growing media. Many of these are premium niche exports that Sri Lanka pioneered in the global market, but buyers will now have little choice but to shift sourcing to cheaper destinations.

The impact, however, goes far beyond trade statistics. Over 800,000 Sri Lankans depend on the coconut industry for their livelihoods, including smallholder farmers, processors, factory workers, logistics providers, and exporters. Over 150,000 direct jobs in the manufacturing and processing sectors are now under immediate threat. A sudden drop in export demand could flood the domestic market with unsold produce, pushing down farm gate prices and cutting off income streams for rural families already grappling with inflation and rising production costs.

The CCCI also warned of a broader economic fallout. A downturn in coconut exports could trigger a collapse in investor confidence and foreign direct investment (FDI), particularly as Sri Lanka works to position itself as a reliable, competitive sourcing destination under its ongoing International Monetary Fund (IMF) reform program. 

With other coconut-producing countries offering stronger policy support and lower-cost structures, there is a real risk of local industrialists shifting operations abroad—taking jobs, capital, and long-term opportunity with them.