The Hindu Business Line : Huge palm oil imports impact coconut oil

UNCONTROLLED import of palm oil, palm kernel oil and other substitutes has become a major threat to the domestic coconut oil industry as it has squeezed the demand for the traditional edible oil in the country.

Coconut oil prices were on the decline and one of the main reasons for this price fall was the uncontrolled import of palm and palm kernel oil and others which were a good substitute to coconut oil, said Mr G. Thalath Mahamood, President, Cochin Oil Merchants Association (COMA).

Addressing the 67th Annual session of the association, he said there was excess production of these oils in the Southeast Asian markets as Indonesia, and Malaysia and that was being dumped into the country as crude palm oil and palm kernel oil and also RBD palm oil. RBD palm oil is directly consumed for edible purposes, particularly in Kerala while crude palm oil is refined and used by the industries.

Thus, ``in both cases, it is a good substitute for coconut oil replacing the use of coconut oil as edible and industrial grade'', he pointed out.

According to him, unbranded coconut oil is increasingly being mixed with palm kernel oil and solvent extracted oil. Both adulterants were difficult to detect when mixed with coconut oil and if the trend continued, coconut oil consumption could come down on a long-term basis leading to a fall in coconut prices, he said. ``We hope the Coconut Development Board will take a note of this issue and work closely with trade to promote coconut oil''.

To solve the crisis, he suggested that sales tax on coconut oil had to be reduced besides enforcing strict control on import of palm oil, both crude and RBD, by raising the import duty to 200 per cent. ``This will increase demand for coconut oil within and outside Kerala'', he said.

Besides, Kerala has lost its position as the main coconut oil producer in the country ever since Tamil Nadu, Karnataka and Andhra Pradesh have become major producers, Mr Mahamood said.

This has resulted in the demand from North Indian markets mainly going to Tamil Nadu because of low transportation cost from there to upcountry markets. All these factors had pushed the milling industry in the State to a serious crisis, he lamented.

He said there were about 2,000 milling units in the State of which at present more than 75 per cent had suspended their operation or closed down due to shortage of raw material.

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Huge palm oil imports impact coconut oil