Agri Business

China evinces interest in importing coconut oil from India

V.Sajeev Kumar | | Updated on: Jun 15, 2022
Indian coconut oil prices are now ruling at $1,947 per tonne against the international price of $1,758

Indian coconut oil prices are now ruling at $1,947 per tonne against the international price of $1,758

It will take some more time for a clear picture to emerge, says Coconut Development Board

China is reported to have evinced interest in sourcing coconut oil from India and could import it for the first time.

Sources in the know told BusinessLine that India has so far not exported coconut oil to China but since the price of Indian coconut oil is ruling at par with competing countries such as the Philippines and Indonesia, the Chinese are focusing on the Indian product.

Indian coconut oil prices are now ruling at $1,947 per tonne against an international price of $1,758. Indian rates during the same period last year were $2,502 compared with the international price of $1,631/tonne.

Leading coconut oil manufacturing companies in the corporate sector are looking at sending shipments, but they have to follow some strict procedures laid out by Chinese authorities before shipping the product.

‘Too premature’

Coconut Development Board, according to sources, has taken steps to coordinate with the Indian High Commission in China to complete the requisite formalities for exports. “It is too premature to say any further details at the moment. It will take some more time to get a clear picture on the emerging business opportunity”, the sources said.

Devraj KK, a business consultant in the industry, said China is one of the largest importers of coconut oil with its major suppliers being Indonesia, Malaysia, the Philippines, Vietnam and Sri Lanka. However, the move to import coconut oil, if it materialises, will definitely come as a relief to the ailing coconut oil industry, which is facing low demand in the local edible oil market.

With adequate support from the Indian Government in export rules and incentives, he pointed out that coconut oil can surely find a big space in the Chinese market. Currently, West Asia accounts for over 60 per cent of the country’s exports.

Raw coconut importer

Thalath Mahmood, Director of Cochin Oil Merchants Association (COMA), said the coconut oil market would get a boost once the exports to China begin. At the same time, market revival will depend on the volume of shipments, either in the form of crude or packed oil. India is already exporting both coconut and virgin coconut oil to the US, Canada, and the UK, thereby garnering a significant market share.

Export prospects will brighten only if Indian prices come down further to benefit the domestic industry. But globally edible oil prices are showing a declining trend due to the easing of supply constraints and this would reflect in international prices of coconut oil as well, said Ubais Ali, CEO of Mezhukkattil Mills.

Earlier, China used to procure huge quantities of raw coconut in bulk from India when prices were hovering at ₹20-22 per kg for the production of milk-based beverages. They had even used shells for biomass and production of activated carbon, he said.  

Published on June 15, 2022
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