Coconut oil, copra prices to strengthen

Price of copra is expected to remain high in the coming months as the conversion of coconut into copra stands minimum due to less arrivals of copra in the market

With the demand for coconut, copra and its value-added products from upcountry markets growing fast, the price of coconut and coconut-based products would remain buoyant in the coming months. The upward trend is likely to persist even during the peak harvest season in the key producing states Kerala and Tamil Nadu.

Price of copra, the value-added product, is also expected to remain high in the coming months as the conversion of coconut into copra stands minimum due to less arrivals of copra in the market. Quality copra is expected to arrive in the market from March 2015 onwards, which will give a boost to the sector, the Coconut Development Board (CDB) stated.

In January 2012, the minimum price of copra was Rs 46 each kg and subsequently it shot up to a maximum of Rs 110 per kg in Tamil Nadu, mainly due to the concurrent estimation of coconut production in the major coconut growing states and the formation of three-tier farmer producer organisations (FPOs), which has helped in capacity-building and marketing strategies adoption.

FPOs in coconut sector have already taken a lead role in ensuring fair, reasonable and steady coconut prices.

The price of coconut and its products, which witnessed a record upward trend in August, 2014 had softened in November 2014. However, after a brief pause, it continued to sustain the upward trend in all the major markets in the country.

The price rise was due to drought in major coconut-growing districts in Karnataka for the past two consecutive years and also due to the inability of farmers to store their produce for conversion to ball copra. A significantly high demand for ball copra in the upcountry market has boosted prices to record level. Prices may sustain further in coming months even the new arrivals are expected to come from May-June.

Also, the market is facing shortage of milling copra as its stocks with the Nafed got fully depleted and also the estimates of coconut production in the major growing states for 2014-15 did not show any significant increase in comparison with the previous year. Meanwhile, the export of dry coconut is witnessing steady increase despite rising domestic prices, whereas virgin coconut oil export is on the rise since December 2014.

In view of these, it can be clearly stated there is hardly any chance of a fall in price of coconut, the Coconut Board said. A false propaganda by oil lobbies targeting the Onam season in August 2014, had resulted in the fall of copra prices to a minimum of Rs 72 per kg. Due to the fervent intervention of the board, the copra price has reached a maximum of Rs 98 per kg, it said.