Agri Business

Why the coconut price rise is not helping growers

V Sajeev Kumar Kochi | Updated on January 09, 2018 Published on December 26, 2017

Prices of raw coconut have risen unprecedently, yet there is no cheer in the industry, even as the market is facing severe supply constraints.

From an average price of ₹25-30 per kg, the rates have gone up to ₹40-45 in the past six months, bringing hope to the ailing sector.

However, the supply crunch across the growing areas have dampened the hopes of farmers.

Dip in output

“Farmers have not benefited from the price rise at a time when both production dip and rate increase was in the range of 50 per cent”, says Sunny George, Chairman, Thejaswani Coconut Farmer Producer Company, Kannur.

Besides, inclement weather condition prevailed in major coconut growing states compared to previous year.

This, coupled with reported diseases on palms in certain growing areas, denied farmers the opportunity to derive the price benefit.

The production this year has decreased significantly in Kerala, Karnataka and Andhra Pradesh due to failed monsoon.

The drop was around 20 per cent in Tamil Nadu following a drought-like situation, resulting in drying up of palms. Unlike in the past, coconut is widely converted to value-added products such as desiccated coconut powder, virgin coconut oil, dry coconut, frozen grated coconut, etc.



Value-addition

These products are high in demand in domestic as well as in international markets. Because of large scale diversification of fresh nuts to various non-traditional products, the Coconut Development Board officials pointed out that the system of determining the price of coconut based on coconut oil and copra rates, which is present across the growing areas, is gradually waning.

Now in major coconut growing areas, desiccated coconut powder price is determining the price of coconut, the officials said.

Price outlook

However, they hoped that the supply situation will improve with the onset of next season. Since all the major coconut growing areas received copious rains in the current year, it is expected that there would be a good crop next year.

It is certain that the price will come down to around ₹30/kg during 2018-19 crop year, the officials added.

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Published on December 26, 2017
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