Copra prices have slipped below minimum support price (MSP) levels and are likely to stay bearish on muted demand amidst higher supply triggering concerns among coconut growers in the key producing States of Kerala, Tamil Nadu and Karnataka.
Modal prices of ball copra or edible copra, which ruled ruled at around ₹13,000 per quintal during early Novermber in the terminal market of Tiptur in Karnataka are now at ₹10,900 per quintal, below the MSP of ₹11,750 per quintal. Similarly, the milling copra, largely produced in Kerala and Tamil Nadu, are ruling below the MSP of ₹10,860 per quintal. Milling copra is ruling at ₹9,000-9,200 in Kerala, while in Tamil Nadu it is around ₹8,200.
“There is no demand for ball copra while the coconut production has improved by about 20-25 per cent due to good rains this year, resulting in a price decline,” said Srikant Kelahatti of Raitha Bandhu in Tiptur.
Pinning hopes on Holi season
While the demand for ball copra during onset of winter was muted, the trade is pinning its hopes on rebound during the forthcoming Holi season, when consumption picks up. The public procurement of ball copra in Karnataka is yet to start for the 2023 season.
“We are demanding that the State government consider giving an additional price ₹3,000 per quintal over the MSP to cover costs.” Kelahatti said. Infact, the Karnataka Horticulture Deparment had suggested a price of ₹16,730 for the Commission for Agricultural Costs and Prices (CACP), while the Centre has declared an MSP of ₹11,750 for 2023 season, an increase ₹750 based on the crop advisory body’s recommendation. The actual cost of production is higher at between ₹18,000-20,000 per quintal, he said.
Thalath Mahmood, Director of Cochin Oil Merchants Association (COMA) said that subdued demand for coconut oil, abundant supply in the market due to good production in growing States and the NAFED decision to sell copra purchased under the procurement scheme during 2022 season are the reasons for the prices to drop.
NAFED procured 40,600 tonnes of milling corpa from Tamil Nadu and 255.5 tonnes from Kerala during 2022.
Mahmood pointed out that copra prices in the open market are expected to come down further once NAFED disposes of the entire procured commodity. The agency procured copra at a floor price of ₹105.90 per kg and they are getting bids at ₹83-85. However, they could sell only around 550 tonnes so far after inviting bids in December because of the muted response from bidders due to the availability of the commodity at lower prices in the open market, he added.
Also, trade sources said the extension of concessional customs duty on imported edible oils till March 31, 2023 to keep prices under check, is seen weighing on the coconut oil and copra prices.