The Hindu Business Line : MSP purchase of copra yet to begin

Sees downtrend
MSP for copra raised to Rs 3,590 a quintal from Rs 3,570.
Copra prices in the open market currently at Rs 3,100 - 3,200 a quintal.
Drop in demand has led to fall in prices.

Kochi , May 1

Non-implementation of minimum support price (MSP) for copra even months after its announcement has deprived the coconut farmers of better price. The Centre has raised the MSP for copra to Rs 3,590 a quintal from Rs 3,570 late last year. But, no agency has commenced procurement. As a result, the copra prices in the open market now rules below the MSP at Rs 3,100 - 3,200 a quintal.

"No agency has initiated any step to implement the MSP," some of the growers alleged. Unlike in the case of crops such as rubber, there is no effective lobby for the coconut growers, they said.

In view of the decline in copra prices coupled with drop in demand for coconut oil, the price of the latter is witnessing a downtrend. Kerala produces an estimated 3.5 lakh tonnes of copra and of which around 50,000 tonnes are bought by major companies manufacturing branded products. The balance is used for milling, from which around 1.7 lakh tonnes of coconut oil are produced, according to industry sources.

Tamil Nadu also, of late, produces an equal quantity of copra. The major manufacturers of branded coconut oil products are absorbing the entire quantity produced there mainly because of the comparatively low prices and saving on transportation cost, they said.

Edible oil demand

Meanwhile, in Kerala, consumption has dropped substantially, said Mr N. Ananthan, former Secretary, Cochin Oil Merchants Association (COMA). Hence, until early 1990s' business in coconut oil could survive, without the help of either marketing or innovation.

The demand for edible oil in the State with a population of over one crore would come to an estimated 3.8 lakh tonnes, taking into consideration the per capita oil consumption of 12 kg per annum at the national level. The coconut oil production here remained stagnant at 1.7 lakh tonnes a year.

The shortage of coconut oil had pushed up its price in the past, which had encouraged large-scale adulteration, forcing majority of consumers to shift to cheap and un-adulterated palm oil, while the elites preferred branded coconut oil of popular companies. This scenario has led to the decline in demand for copra and a consequent drop in its price.

In fact, before 1980's share of coconut oil in Kerala as edible oil was 80-85 per cent, but now, as per available data, it has come down to 40-45 per cent and palm oil has taken the lead with over 50 per cent. The situation in the case of other edible oils such as of mustard and groundnut was not different, he said.

During 1979-80, the share of groundnut oil and mustard oil (rapeseed oil) was 58 per cent and 28 per cent, respectively, but in 2002-03 it has come down to 14 per cent and 13 per cent, respectively, and the share of palm oil and soya oil has gone up to 38 per cent and 22 per cent, respectively.

Till 1970's either palm oil or soya oil was not in use as edible oil in the country. Only after the advent of liberalisation, import of these oils started. Imports of edible oils have increased from mere 4.8 lakh tonnes in 1990-91 to 50 lakh tonnes in 2004-05. India's production of edible oil is enough to meet only 60 per cent of our requirements and the balance 40 per cent is met by imports, he said.

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