The Sri Lankan economic crisis has opened up new markets for coconut oil exports from Kerafed – the cooperative federation of coconut farmers in Kerala.
“We have received firm enquiries from Europe and Australia for the supply of coconut oil, which was hitherto catered to by Sri Lanka,” Ashok R, Managing Director, Kerafed, told BusinessLine. The crisis in the island nation is reported to have disrupted its coconut product exports and those overseas clients are scouting for supply from other sources.
However, Kerafed — the largest producer of coconut oil in India with sales of 1,000 tonnes per month — is unable to meet the additional overseas demand due to the burgeoning domestic market. It is attempting to increase its production capacity at the Karunagappilli manufacturing facility from 90 tonnes per day (TPD) crushing to 250 TPD; the facility is expected to be ready within six months, Ashok said.
Besides coconut oil, there are enquiries for coconut value-added products such as milk powder, desiccated coconut powder and so on, from Germany, Malaysia and other countries. Sri Lanka, however, has the advantage of lower production costs.
Kerafed is set to re-start coconut oil exports to Gulf countries, which were suspended in 2016 after raw coconut prices surged. It also plans to launch value-added products such as virgin coconut oil, baby care oil, hair oil, packed tender coconut water, chips, and so on based on the demand for them.
According to Ashok, the non-availability of packaging pouches has forced the company to cut coconut oil production in recent times. Supply of polymer, the raw material used to make the pouches, has been reportedly hit by the Russia-Ukraine conflict. Prices have zoomed to ₹277 per kg from ₹163. Since its supply from Hyderabad has been hit, Kerafed has floated tenders from firms in Pune and Nagpur to tide over the crisis.
On the financial side, Ashok said Kerafed has achieved an operating profit for four consecutive years since 2017-18, with the figure touching ₹13 crore in FY21 on a turnover of ₹314 crore. With more coconut value-added products, the company is aiming for a ₹1,000-crore turnover in the next five years.