A fall in production and supply constraints are pushing coconut oil and copra prices to record levels, forcing millers of many small-scale units in Kerala to shut down for want of sufficient raw material.
Thalath Mahmood, president of Cochin Oil Merchants Association (COMA), said the wholesale prices of coconut oil in Kerala reached ₹261 per kg. Copra prices have vaulted to ₹174, closing in on the highest price of ₹200 reached during 2017-18. Currently, copra supply has declined by 40-50 per cent in Kerala and Tamil Nadu, disrupting the operation of small-scale milling units.
He said upcountry buyers especially from North India are abstaining from the market due to high price. Though the retail price of coconut oil has touched ₹300, the farming community has hardly been benefitted as the slump has taken raw nut price to ₹65-70 per kg compared with ₹30-35 six months ago, he said.
The Association alleged that some traders in Tamil Nadu and Karnataka are holding the stock to take advantage of higher prices. COMA urged the government to conduct an enquiry about this and book the culprits.
Global shortage
Ubais Ali of Mezhukkattil Mills said the supply shortage is felt globally, with the output falling across producing countries due to climate change and drought-like conditions and rising demand for coconut oil and other coconut-based derivative products in the European Union. China is also procuring large quantities of coconuts from Indonesia for making value-added products.
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However, he said the rising price is expected to ease with the start of the harvest season soon in many producing states. The rising trend of prices was also observed in 2021, 2018 and 2014. The export demand has been subdued because of the rising prices as the increase was around ₹100 in six months.
Industry sources said that export of raw coconuts, diversion to other value-added products and high demand for tender coconuts in the scorching heat have all affected copra supply. The product diversification, export opportunities under FTA’s all have generated demand for coconuts. But the production was not commensurate with the demand, sources added.