Kerala’s move to impose tax on coconut oil draws flak from industry

Protest is brewing over Kerala government’s decision to impose five per cent tax on coconut oil in the revised State Budget.

According to Thalath Mahmood, President, Cochin Oil Merchants Association, the decision would have far reaching consequences on traditional oil millers numbering around 400 in small and medium category who are already reeling under a crisis due to continuous fall in prices. The imposition of a levy on coconut oil would result in higher coconut oil prices, forcing consumers to shift to other edible oils where there was zero per cent tax. Hence, the millers would resort to keep the copra prices artificially low and this would have an impact on coconut farmers in the State, he said.

The Association, he said, will meet the State Finance Minister to request him to withdraw the tax on coconut oil with immediate effect for the overall benefit of the sector.

The coconut oil market, he said, is passing through a difficult phase as is evident from the continuous fall in prices at ₹7,550 per quintal in Kerala and ₹7,300 in Tamil Nadu. Copra prices also further moved southwards at ₹5,100/quintal in Kerala and ₹5,000 in Tamil Nadu. He also alleged that the government has not yet started any move for copra procurement even as the neighbouring Tamil Nadu commenced the initiative one month back.

Bharath Khona, former Member, COMA, was of the view that the market would stabilise at this level as small and medium corporate companies and upcountry buyers started venturing at such low level prices. The loose oil market in Tamil Nadu has come down to ₹1,070 for 15 kg.

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