Hit by the spiralling price of coconut and copra triggered by a sharp plunge in its availability, coconut oil manufacturers are considering seeking permission to import them to meet their requirements.
Thalath Mahmood, president of Cochin Oil Merchants Association (COMA), told businessline that manufacturers are planning to approach the government to lift the restrictions on imports of coconuts and copra, as the industry is reeling under a severe crisis due to acute supply shortfall.
Currently, there is a shortage of 30-35 per cent in availability, which is steadily getting acute. The crisis can be dealt with by importing coconut and copra from other producing countries such as Indonesia, Philippines, Sri Lanka to meet the industry demand, he said.
Oil prices soar
The shortage of raw material has pushed up the retail prices of coconut oil to reach ₹350 per litre. This is expected to soar to ₹400 soon. Likewise, copra prices are also moving up and have reached ₹188 per kg in Tamil Nadu and ₹186 in Kerala. As many as 25,000 workers are engaged in the small and medium coconut oil manufacturing sector and the rising prices of the raw material have hit the functioning of many units in the State, he said adding that the price of coconut is now ₹62 per kg in Kerala and was hovering around ₹20 last year.
Admitting a shortage in the market, official sources said there has been a crisis across the producing countries with climate change being a major contributor hitting production. There has been a supply shortage across production countries. Besides, the rising demand and consumer awareness for coconut-based value-added products have also led to the slump. The rising demand for tender coconut in the summer also aggravated the shortage. The production in 2023-24 crop season was 21,374 million nuts.
China buying more?
It is estimated that there are around 2,000 coconut-based product manufacturing units, and of this, about 400 are in Kerala. There are also reports that China is procuring large quantities of coconuts from Indonesia to manufacture value-added products, an industry source said, adding that the product diversification, export opportunities under FTA’s all have generated demand for coconuts. However, the production was not commensurate with the demand.
KK Devraj, a consultant in the coconut oil industry, said prices of coconut oil and copra have reached record levels during the last few months despite higher arrivals this season in Kerala. The season is expected to be over by the end of May or early June when the monsoon sets in, which will create a further shortage of copra and push up prices.
The per capita consumption of edible oil in India has now reached about 25 kg, which is triple the figure of the year 2001, when it was around 8.2 Kg. This has also reflected in the coconut oil market. The demand of around 25 to 26 million tonnes is largely met by the import of vegetable oils, which is currently around 60 per cent.