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The hike in MSP of copra has evoked a mixed response from the industry. While growers in Kerala are jubilant over the government’s decision, makers of ball copra and milling copra feel the hike is insufficient to even cover their input costs.
The government has increased the MSP up to ₹2,170 per quintal to ₹9,521-9,920 for 2018-19 season.
The MSP of ball copra has been increased by ₹2,170/quintal to ₹9,920 for the 2018-19 season . The support price of milling copra has been raised by ₹2,010/quintal ₹9,521 for the current year.
Long-term gains
The rise in MSP is based on the government policy of providing 1.5 times increase to the cost of production and it will definitely benefit the coconut farmers in a big way, sources in the sector said.
Welcoming the decision, Thalath Mahmood, Director of Coconut Oil Merchants Association (COMA), told BusinessLine that there would not be any immediate impact on MSP on copra, raw nuts and coconut oils in the short-term as the prevailing prices are higher than the declared support price. At present, the copra prices are ruling at ₹11,800 per qunital and are unlikely to come down due to higher demand.
In the long-term, the MSP will benefit the sector as the domestic prices of raw nuts would not go down below ₹26 per kg. The farmers will be benefited by an assured price even in bumper production, lean and off season.
However, the sources were of the view that the higher MSP would impact the global competitiveness of domestic coconut prices vis-a-vis international rates, which are cheaper. For instance, the international prices of raw nuts are ruling around $200/tonne, whereas the domestic prices are in the range of $400-450, the sources said. Producers of ball copra, edible copra are not happy with the increase in MSP.
Ball copra makers
“Though there is a 22 per cent increase in MSP over last year, it is still below the cost of production of ₹11,529/qunital,” said Anekatte Vishwanath, convenor of the Consortium of Coconut Producer Companies in Karnataka. The MSP of ball copra should be at least ₹13,000/quintal, he said.
Ball copra is largely produced in Karnataka and the costs are on the higher side as the process of converting mature coconuts into ball copra takes almost an year for the farmer. Ball copra prices are currently ruling around ₹17,000 as the production has been affected due to successive droughts in the key producing regions of southern Karnataka.
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