The Onam festival season has dashed the hopes of coconut farmers in Kerala, as they typically expect a marginal improvement in prices of raw nuts, oil, copra, etc. especially with the rise in consumption.
However, the prices this time is moving southwards with raw nut prices dropping to ₹23 per kg, copra to ₹82 and coconut oil hovering between ₹132-135.
The farming community attributes the price drop to higher production in South Indian producing centres. With the off-season starting from July, there is hardly any chance for a revival in prices this year. Moreover, there could be a further hit on the prices with the arrival of new crop by December-January, said Sunny George of Thejaswani Coconut Producer Company in Kannur.
MSP for coconut
The only solution to help farmers is to revive the procurement drive without any political agenda. The government has already announced a Minimum Support Price of ₹32 for procurement, but was lagging due to lack of infrastructure, he said.
However, official sources maintain that the price drop for nuts would be favourable for exports, with current rates ruling at par with international prices. However, due to higher domestic consumption, India could not tap the export market. The current export boom would be beneficial to garner ₹4,000 crore foreign exchange revenue in the current fiscal against the previous figure of ₹3.236 crore.
The price drop has put the farming community in crisis and the cultivation would be viable only when farmers get at least ₹30 a kg for raw nuts. The MSP procurement drive was derailed due to a lack of required infrastructure facilities. Moreover, the restraining of Kerafed from procurement in view of its coconut oil production also slowed down the process, the sources said.
According to Thalath Mahmood, Director of Cochin Oil Merchants Association, declining prices of other edible oils has also reflected on coconut oil. Coconut oil consumption was down in Kerala and reported to be in the range of 1.5 lakh tonnes annually vis-à-vis 3 lakh tonnes a decade back. At the same time, palm oil consumption rose and is stated to be around three lakh tonnes, he said.
K.K.Devraj, a business consultant said coconut oil market was flooded with new brands launched by upcoming players and co-operative societies, giving consumers a choice thereby resulting in low prices. A substantial shift to other edible oils was also seen. The lower prices of edible oils have spurred demand from India for October festival season, the world’s biggest vegetable oil consumer.
Palmolein stocks in Malaysia are reported to be at a three-year high due to peak production, which would be extended for a couple of months. Sunflower imports are also steadily increasing, mainly supported by the soft international prices, he said.