It could be bad news for coconut farmers, as the price of the nut is tending to drop by half compared to the rates that prevailed in 2011.
From an all-time high of Rs 13 a nut last year, the price in Tamil Nadu markets slipped to Rs 9 in January, and is seen easing further to Rs 5-7 .
Market sources do not anticipate any spurt in the price of coconut at least till May. Trade sources attribute the price fall to low demand and high production.
The Domestic and Export Market Intelligence Cell at the Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, has, after analysing the trend in the Pollachi market, advised farmers to sell the nut on harvest.
According to trade estimates, copra production might touch 10.5 lakh tonnes this year. Of this, the share of Tamil Nadu is expected to be 40 per cent, Kerala 30 per cent and Karnataka and Andhra Pradesh put together 25 per cent.
Surplus copra coupled with inadequate industrial demand is expected to ease the price of the coconut oil as well, say sources.
The low price of palm kernel oil is seen as another reason for the fall in coconut oil prices apart from the frequent power shutdowns in the State.