The decision by National Agricultural Cooperative Marketing Federation (NAFED) to sell copra procured from farmers in the open market has pulled down prices of the commodity.
Copra prices are hovering at ₹87 per kg in Kerala and ₹82 in Tamil Nadu. Traders pointed out that prices were in a revival mode to reach ₹96 after dropping to ₹76 two months ago. However, the NAFED decision has further hit the prices.
The emerging situation is likely to impact the prices as it would be convenient for upcountry coconut oil manufacturers to purchase copra from the government agency rather than from the open market, traders said.
Awaiting clearance
NAFED had procured around 40,600 tonnes of milling copra from Tamil Nadu and 255.55 tonnes from Kerala under the procurement scheme during 2022 season through multiple portals.
Since the highest bid received by NAFED for the copra sale is lower than the market rates, official sources said that they are awaiting clearance from headquarters. The highest bid was at ₹83.
Thalath Mahmood, Director of Cochin Oil Merchants Association, told businessline that NAFED procured the copra at a floor price of ₹105.90 per kg in February and the bid rate at ₹83 would incur a loss of around ₹22 per kg, forcing the government to reimburse the difference in prices. NAFED cannot stay away from the market for a longer period and it has to dispose the commodity off at the earliest before affecting its quality.
The market, he said, is witnessing declining trend in the absence of upcountry demand and corporate buying. Sabarimala copra has started arriving mainly to Tamil Nadu. Because of the heavy rush in the hill shrine, there could be heavy copra arrivals, which is used both for industrial and edible purpose.