"Exports of DC declined because they could not get enough nuts owing to the competition for nuts from the coconut oil mills," he said. "Now with more nuts coming, DC millers will also be competitive."

Sunil Watawala of the DC Millers Association SAID the seasonal crop which, along with the recent sharp reduction in import duty on edible oil imports, should help lower prices and make more nuts available for DC mills.

The shortage of local nuts had made local DC exports uncompetitive, he said.

"We quoting 200 rupees a kilo while buyers were quoting 190 rupees," he said.

"Now most mills are idling and there's labour unrest because they have no work."

However, he said, the situation should improve if import duty on edible oils remain at the new lower levels so that nut prices remain low and more nuts become available for DC mills, he said.

Sri Lanka's DC industry has an installed capacity of 90,000 metric tonnes but they managed to export only 45,000 tonnes last year, Watawala said.

"The whole problem is that there's not enough nuts available to feed all industries – such as oil, DC, milk, copra, and the export of jumbo nuts.

The island needs four billion nuts to meet the needs of all industries, he said, but the crop is usually between 2.8 – 3 billion nuts.

"We're trying to service all the industries with an inadequate supply of nuts. The result is that nuts are finished in double quick time.

"Last year the huge price hike in nuts happened because by the end of November we finished off all coconuts that were on ground."