The Cochin Oil Merchants Association (COMA) has raised its concern over the 5 per cent GST on coconut oil, copra and coconut oil cake, saying that this has led to a consumer shift to other cheap edible oils.

According to Thalath Mahmood, Director, COMA, the local consumption of coconut oil has been hit by GST as the consumer has to spend ₹10 more per litre, while other edible oils such as sunflower, palmolein, rice bran are available at lower prices.

“Coconut and its products are never subject to any duty or tax and the authorities should exempt these products from the purview of GST. The taxation on coconut oil will affect the milling industry,” he said.

He pointed out that there is no GST on neem oil cake, groundnut oil cakes etc, which are used by extraction mills. The GST on coconut oil cakes will result in a hike in cattle-feed prices.

Disputing the claim of a shift in coconut oil consumption due to GST, Coconut Development Board officials maintained that the oil was earlier subject to 5 per cent VAT by the Kerala government and these rates were reintroduced in the form of GST.

Board view

Moreover, the majority of consumers are health-conscious and prefer quality oils irrespective of price, up to a certain level, it said.

Meanwhile, coconut oil prices have surged to a new high this season, touching ₹16,100 per quintal in Kerala. There was an increase of ₹200 per quintal in one day. Copra prices too were up at ₹11,700.

COMA attributes the price increase to a supply crunch due to production shortage and surging export demand for both coconut oil and raw nuts.

There is a rising demand for good quality copra, especially to West Asian destinations and for ball copra (peeled de-shelled dry coconut) for Chinese markets.

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