Cut in duty 'kills' copra

COIMBATORE: A sharp cut in the import duty of edible oils has resulted in a drastic drop in prices of copra in Pollachi, the coconut capital of Tamil Nadu.

Its prices crashed due to lowering demand for coconut oil as other edible oils like soya bean oil, refined sunflower oil, and palmolein oil cost less after their import tax was cut from 17.5 per cent to 15 per cent in June.

Eventually, an increase in the import of these oils led to a drop in the prices of coconut oil and in turn dealt a hard blow to copra farmers. Nevertheless, the consumer’s taste preferences have also begun to change for imported oils rather than native oils. The copra prices have crashed to an all-time low of Rs 73 per kg as against the government fixed minimum support price (MSP) of Rs 108.60. Last month, it was sold in the open market for Rs 80. A few years ago, copra was sold at a much better price of Rs 140 per kg.

 “With procurement by the government drawing to an end this month, the prices of copra are likely to go down further as its production also continues to be at its peak since March. Copra has been selling at a price, for which it was sold 20 years ago. This despite a heavy increase in labour wages, transportation cost, fertilizer cost, electricity charges, and others in all these years,” said N Thangavel, member of Tamil Nadu Coconut Producers Association.

Even during the COVID-19 pandemic, when there was no import of edible oil, the prices of copra remained steady. So is there a way for farmers to come out of the crisis?

“The government should speed up its proposal to sell coconut oil in PDS shops instead of palmolein oil to overcome the present crisis. Similarly, value-added products like coconut powder and other eatables made of coconut could be sold in tetra packs through Aavin,” he added.

There are more than 3,000 copra drying units in Tirupur and Coimbatore districts and thousands of people are employed directly and indirectly in these units. Farmers also demanded that the GST for copra should be brought down from five per cent to one per cent.

“Unless the government pitches in with supportive mechanisms to save the livelihood of farmers,” say farmers.

No gain for coconut exports despite low freight charges

Even though the issue of container shortage has eased and freight charges have come down significantly to normalcy, coconut exports from Pollachi remain utterly sluggish.

With exports crashing by over 50 per cent, the huge volume of coconuts has stagnated in the sprawling farms.

“Shipment of a 40 feet container to Dubai, which cost Rs 3.25 lakh until a few months ago since COVID-19 outbreak, has reduced considerably to Rs 1.30 lakh now.

Similarly, a 20 feet container has slashed from Rs 1.5 lakh to less than Rs 70,000. Even though container shortage has eased completely, the export of coconuts mainly to Gulf nations remains sluggish for reasons unknown,” said M Anandaraj, a coconut exporter in Pollachi.

For exporters, thus far the container shortage remained a serious issue. “I used to export coconuts to around ten countries including London, Germany, Iran, Canada, Malaysia and gulf nations by atleast six containers a week from Pollachi. Now, sending even four containers a month has become a challenging task. The situation is unlikely to improve for the next two months. Currently, only 40 per cent of coconuts are being sent to Dubai and Saudi Arabia, while regular load is sent only to London and Malaysia. The exact reason for low demands in gulf nations is not known,” he added.

Globally, the Pollachi coconuts are preferred over other importing nations for their long shelf life and better quality. Even though coconuts are exported widely from other countries like Sri Lanka, Bangladesh, Philippines, and Indonesia, they apparently don’t pose a challenge to coconuts from Pollachi, which are unique in taste.

Farmers claimed that coconuts in large quantities have stagnated due to a couple of factors. For the second consecutive year, there is a bumper yield of coconuts, and as well as a drop in exports has resulted in a heavy price drop in the domestic market too.

“The farm gate price of a coconut hovers around Rs 8 per piece, which doesn’t help a farmer to recover even its input cost,” said S Raguram, a farmer.