Agri Business

Erode’s coconut oil industry in doldrums

Erode | Updated on December 11, 2020

Coconut oil industry was a flourishing trade till 2014 but after that many crushing units in and around Erode, where agricultural activity is the mainstay, were closed gradually.

RM Palanisamy, a coconut oil trader, said, “Kangeyam, Vellakoil and Uthukuli are the major coconut oil crushing centres, where more than 2,000 big and small crushing units were started and daily more than 750 tonnes of coconut oil was sent to all over the State and also to other States like Karnataka, Maharashtra and Kerala. But now, crushing units were started in Karnataka, Kerala and Maharashtra. So buying of the coconut oil from Tamil Nadu has come down to 20 per cent”.

He said in Tamil Nadu alone, the farmers have planted coconut trees over one lakh acres in Pollachi, Erode, Peravurani, Pattukottai, Vellore, Salem district and some other places. The crushers used to buy the coconut and with the help of skilled labourers the farmers converted the kernel into copra.

Added to this, a number of private popular companies have started the crushing mills, produce the oil, sell them with brands. So the buying of coconut oil from Tamil Nadu has decreased and also after the imposition of GST tiny crushing factories were closed.

He wanted the Union government to exempt the oil industry from GST, so that many small units will start crushing.

Palanisamy said now the copra price is high and selling at ₹130 a kg. The cost of production for the oil also increased. Only 600 gram oil can be obtained if 1 kg of copra is crushed.

Chandrasekaran, a coconut oil consultant, said due to the Covid-19 pandemic, the demand for the bulk loads has decreased to 20 per cent. The cost of production of the oil also increased. But still demand for the virgin coconut oil is on the rise. At present, very few refined coconut oil mills are functioning due to financial problems and also strict rules.

He said on January 1, 2020, a kg of copra was sold at ₹94-98 a kg. Now it is selling at ₹128-130 a kg. This is due to an increase in price of the tender coconut and also paucity of skilled workers to convert the tender coconut into copra.

He demanded the Government to provide permission for granting license to start “Refined Coconut Oil” without making any delay in sanction, so that more virgin coconut oil can be produced and exported to other countries to earn good foreign exchange.

C Nallasamy, President, Lower Bhavani Project Ryots Association,

wanted the State Government to procure the copra throughout the year at a reasonable Minimum Support Price and sell to the oil industry. If this is done the copra price may come down and the farmers will be much benefited.

Published on December 11, 2020

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