Agri Business

Copra MSP: Mixed reactions from producers

V Sajeev Kumar, Vishwanath Kulkarni Kochi/Bengaluru | Updated on March 13, 2020 Published on March 13, 2020

High domestic prices are not conducive for the export of coconut products   -  Kamal Narang

The 4.61 per cent increase in minimum support price (MSP) for the milling copra variety at ₹9,960 per quintal for the 2020 season over the previous season has brought cheers to producers and the processing industry in Kerala and Tamil Nadu. However, the producers of ball copra variety in Karnataka are disappointed with the 3.83 per cent increase at ₹10,300 a quintal.

Hailing the MSP hike, Thalath Mahmood, president of Cochin Oil Merchants Association (COMA) said the decision would benefit coconut farmers. This would give a confidence among farming community on the support extended by the government to carry out coconut cultivation. However, at present, the procurement price in Kerala is on the higher side with Kerafed procuring copra at ₹107 per kg.

However, highly placed sources in the industry told BusinessLine that the MSP hike would not make any major impact because of higher prices of copra in Kerala which is ruling high at ₹105 per kg (₹10,500 per quintal), while it was above ₹9,500 in Tamil Nadu. But the government support would ensure that there would not be any further crash in prices and the rates would expected to hover in the range of ₹10,000 per quintal even in the peak production period.

High domestic prices

The sources also noted that the high domestic prices are not conducive to exports of coconut products, which has been witnessing a declining trend in the last two years. Indian copra prices are ruling at $1,350 per tonne, while international rates stood at $550. India is a global leader in production and productivity of copra.

With the government support for copra, the chances of a declining trend in raw coconut prices is remote. However, it would not benefit the coconut industry and the prices should remain ideally in the range of ₹25-30 per kg to earn more foreign exchange, the sources said.

The milling copra production is estimated approximately at 10 lakh tonnes last year, while ball copra at 3 lakh tonnes. Ball copra prices are hovering around MSP levels at ₹10,000 in the Tiptur market of Karnataka, the main producing region. Ball copra is mainly used for edible consumption and is considered in the dry fruit category, while milling copra is mainly used to extract coconut oils.

Ball copra makers upset

Ball copra producers in Tiptur said the Centre and the Commission for Agricultural Costs and Prices (CACP) have yet again overlooked their plea to factor in the ‘actual’ cost of production for the ball copra variety, while declaring the MSP.

The production of ball copra variety, produced in the districts of Tumkur, Hassan and Chitradurga of Southern Karnataka, incurs a higher cost of production when compared to the milling copra, growers claimed.

The growers said that the CACP has considered the production cost of ball copra and milling copra the same, while arriving at the MSP.

Unlike the milling copra, which is produced by cutting open the coconut and drying the coconut kernel either in direct sunlight or using the driers in a couple of days, the production process of ball copra is pretty lengthy and costlier one. It takes about a minimum of 9 to 11 months to produce ball copra.

Farmers dry the mature coconuts for at least 11 months during which process the water in the nut gets dried naturally, lending unique sweet taste to copra. The dried nut is de-husked and de-shelled to obtain copra, which is in ball shape. Hence, it is called ball copra.

Production costs

“The production cost of ball copra is estimated at ₹ 20,200 per quintal. About 725 coconuts are required to produce one quintal of ball copra. Including the costs of storage, interest charges for 9 months and labour costs for de-husking and de-shelling, the total production costs works out to ₹20,200 per quintal for the farmer. Considering that the ball copra is a unique product, the government should declare MSP that covers the production costs,” said Srikant Kelahatti of Raitha Bandhu, a commission agent and copra trader in Tiptur.

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Published on March 13, 2020
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