Agri Business

Import of Sri Lankan desiccated coconut powder may be curbed

V Sajeev Kumar Kochi | Updated on October 25, 2019

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Coconut Board wants minimum import price

 

The Union Government is reported to be considering imposing restrictions on the rising imports of desiccated coconut powder from Sri Lanka so as to protect the domestic industry.

The figures available with Coconut Development Board reveal that DC powder imports from the island nation have increased manifold, touching 7,450 tonnes in the first four months (April to June) of 2019-20 vis-a-vis 582 tonnes in the corresponding period of the previous year. The total imports during 2018-19 were 5,340 tonnes.

 

Highly placed sources in the sector told BusinessLine that the Commerce Ministry has taken comments from the Coconut Development Board in this regard, as many of the domestic DC production units are on the verge of closure following the dumping of DC powder from Sri Lanka.

The Board, it is learnt, has suggested introduction of a minimum import price for DC powder at ₹150/kg or even imposing a safeguard duty.

The rising imports have made an impact on domestic manufacturing units, where their number declined to 50 in the last two years from 150 units. It is pointed out that DC shipments in bulk quantities have been coming in under te South Asian Free Trade Agreement (SAFTA) with nil import duty. The Sri Lankan DC powder in the domestic market is pegged at ₹100 per kg, whereas domestic prices are ruling at ₹128/kg. This price parity has forced end users such as bakeries, food and confectionery production companies to look at imports.

From exporter to importer

However, there are even takers from the domestic market such as big corporates who rely mainly on quality. There are also reports that imported powder is widely mixed with local brands and this is affecting the quality of the powder available in the domestic market. DC powder is used as an ingredient in savoury and sweet recipes to impart coconut flavour, the sources added.

India is a major producer of coconut globally and DC powder has evolved as a major value-added product. There was a time when the country exported more than 5,000 tonnes. However, the trend has now reversed with a substantial increase in imports. The bulk arrival of DC powder has led to the closure of local factories in Karnataka, Tamil Nadu and Kerala, forcing domestic companies to take up the issue with the Government to put restrictions on imports.

P Haridasan, proprietor of Kairali Eco Products, Kozhikode, pointed out that his company used to sell around 8-10 tonnes of DC powder on a monthly basis across the State and this has come down by half in the last few months. “Earlier we thought the declining sale was due to the general slowdown being witnessed in the country. But later we found that it was Sri Lankan consignments that has taken over,” he said.

Published on October 25, 2019

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