A subdued north Indian demand coupled with higher production has hit milling copra prices, which fell further to ₹76 per kg. The current price, according to traders, is much below the support price announced by the Kerala Government at₹105.
Normally, the Navaratri season witnesses a rising price for the commodity due to demand from north Indian markets, but this trend was missing this year. Ball copra prices were reported to be down at ₹112 per kg.
Thalathi Mahmood, director of Cochin Oil Merchants Association, said a further drop in prices was expected ahead of the Sabarimala pilgrim season, which sees a huge demand for raw nuts from devotees as offerings for the hill shrine.
Citing the current price drop due to higher production in all the south Indian centres, he said the procurement drive by government agencies was not effective due to lack of adequate infrastructure facilities. He reiterated the association’s demand for procurement through open market, rather than from farmers, to fetch a better price.
Time for futures trade?
Mahmood urged the government to re-start futures trading in copra and coconut oil, which was suspended years ago due to rising prices. This would enable price discovery and benefit traders and farmers. While coconut oil is used as a cooking medium in Kerala, it is mainly used in industrial production in other states, he said.
KK Devraj, business consultant, pointed out that the low demand for coconut products from North India has pushed farmers deeper into crisis. Moreover, with consumers, especially the younger generation, shifting to other soft oils, coconut oil is losing its traditional hold in Kerala, he said.
Good local production and abundant supplies from neighbouring states have also kept copra prices subdued. International prices of sunflower oil, palmolein and so on have been declining over the past few months and the ripple effect is seen in coconut oil also.
“Unless we find alternative use or untapped market the price may not improve,” said an official source in the sector. Raw nut production in many centres have exceeded estimated figures due to increased cultivation. But authorities do not have the figure on new planting area, he added.