After hitting ₹15,000/quintal, copra prices in the key producing States of South India have reversed their trend over the past few days due to slack corporate demand amidst reports of imports from Indonesia.

The drop in prices in the last 4-5 days was around ₹1,500/quintal and the Cochin Oil Merchants Association (COMA) attributed this to the decision of corporates dealing in coconut oil exports to abstain from the market.

Dip in prices

Thalath Mahmood, President, COMA, told BusinessLine after touching a record ₹15,000 in the last one month, copra prices have dropped to ₹12,000 per quintal in Tamil Nadu and ₹13,000 in Kerala.

In Karnataka, the modal prices for the ball copra have dropped by around ₹2,000 since mid-February to around ₹11,000 at Tiptur, the key market.

Part of the domestic demand, Mahmood said, has shifted to copra from Indonesia imported under the advance license scheme by exporters even though the government did not allow copra imports under OGL to avoid a slump in domestic prices.

Raw nuts supplies

Having put the market under pressure, Mahmood alleged that corporates have started colluding to bring down the prices further. With the starting of the harvest season in Kerala, Mahmood said the rates are likely to fall in the coming months with more availability of raw nuts.

Bharat Khona, former Board member of COMA, said that the sudden fall in prices and the method adopted by companies to fix the rates have virtually impacted the market in the recent period, resulting in a subdued demand. The fall in prices was also reflected in coconut oil prices which were at ₹17,300/quintal in Kerala and ₹16,800 in Tamil Nadu.

Copra imports

Officials at the Coconut Development Board admitted that there were limited quantity of copra imports by some players under the advance licence scheme.

While there was no confirmation or estimates on the quantum of imports, growers said the sentiment has hurt the prices.

Besides, major buyers — mainly the oil companies — have stocked up copra to meet their production requirements and their decision to limit the procurement has led to the price fall.

“The decline in prices will hurt the growers as they have been facing a production loss due to consecutive droughts in Karnataka,” said Anekatte Vishwanath of the Coconut Growers Association in the State.

The government should consider the growers interest while formulating the import policies, he added.

In Karnataka, where coconut is grown on over 5.5 lakh ha, growers are reported to have faced a production loss of around 40 per cent due to consecutive droughts

Prices to drop further

Meanwhile, the CDB officials said the exports of desiccated coconut powder, of late, has come down drastically due to higher domestic price of raw nuts.

The supply situation is likely to improve with the onset of next season this month and the higher domestic price is expected to come down to ₹30/kg for coconut; ₹100/kg for copra and ₹150/kg for coconut oil in 2018-19 season, the officials added.

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