Coconut supplies dry up

The coconut oil market is likely to see a shortfall in supply and rise in prices till the end of January 2005 as production of coconut in the current year will be less than expected, according to traders here.

The shortfall is estimated to be in the region of 20-30 per cent of the average crop.

The crop was far short of estimates in Tamil Nadu and Karnataka while production in Kerala was marginally short.

According to estimates released by the Coconut Development Board (CDB), total cococonut production in 2002-03 was 1214 crore nuts.

In 2003-04, nut production was down by at least 20 per cent through final figures were yet to be released by CDB, trade sources said.

In the current year, i.e., 2004-05, the decrease in nut production was expected to continue, according to sources at CDB.

Sources close to growers said that there could be as much as 40-50 per cent shortfall in nut production in the current year.

The shortfall in production would inevitably push up prices for oil as well as other coconut-related products, they warned.

Coconut oil fetched the highest price in the world in India becuase of huge domestic demand.

In Chennai, the wholesale price of coconut oil was recently at Rs 9030 per quintal, which was the highest price ever recorded in the world.

The price of coconut oil in Indonesia, world's largest coconut producing nation, was only Rs 3000-3500, as it was used there mainly used for industrial applications.

In 2002-03, the state of Kerala produced 534 crore coconuts, represesnting 44 per cent of total production in the country.

Tamil Nadu produced 286 crore nuts or 24 per cent of the national crop, followed by Karnataka with production of 150 crore nuts or 13 per cent of supply.

Growers said coconut production in Karnataka and Tamil Nadu had been hit by a combination of droughtlike conditions and diseases attacking the trees.

At the same time, steady domestic demand pushed up the price of not only coconut oil but of other products like coconut shell.

Export of coconut shell was on the rise, with big buyers emerging in Japan and other east Asian markets. The price had increased to Rs 2300 per tonne in recent weeks.

The coconut shell was being used for various applications including as ice-cream cups in these countries. The price of coconut oil was till recently moving in a narrow range of Rs 7350-7400 per quintal.

Sources in the market here said they did not expect the rising price trend to ease at least in the next one month or so.

The shortfall of copra had become so accute at present that the Rajapur variety ball copra was selling recently at Rs 7400 per quintal in the Kozhikode market.