Coconut export in doldrums due to high freight rates

COIMBATORE: An acute shortage of containers and skyrocketing freight charges has left coconut exporters from Pollachi, the coconut capital of the state in doldrums.

Coconut exports, mainly to gulf countries and European nations have witnessed a drastic drop due to unviable freight charges and longer waiting period for containers. Shipment of a 20 feet dry container (DC) to Dubai, which normally costs Rs 80,000 six months ago, has skyrocketed to Rs 3 lakh now. Similarly, a container to Felixstowe Port in UK has surged from Rs 2.5 lakh to Rs 7.5 lakh.

“Container shortage is becoming a serious issue for exporters. Unless the government intervenes, there is no possibility for normalcy to return,” said M Anandaraj of Sushmi Exports in Pollachi. Eventually, the high cost of logistics has slowed down coconut exports to a woefully minimum quantity.

“I used to export coconuts by at least six containers a week to 11 countries with 60 per cent meant for Dubai. Now, sending even three containers of coconuts has become a difficult task. Also, containers need to be booked in advance and the wait stretches beyond a week with uncertainty,” he added.

Globally, ‘Pollachi coconuts’ are preferred over other importing countries for their longer 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.

However, due to surmounting inconvenience faced by exporters, the number of coconut exporter units has reduced from more than 100 to a pathetically low of around 10 in the current scenario.

A Thangavel alias Periappan, another exporter from Devipattinam in Anaimalai near Pollachi, said that until a few years ago, the coconut producers, who were into exports used to fix the price of their produce.

“This trend seems to have changed now with the importer deciding upon the rates. The heavy increase in labour costs and transportation charges following fuel price hike has pushed up the overall prices of our produce. Therefore, farmers and exporters are running the risk of losing out business in the global market,” he said.

Further, a sharp fall in exports has led to stagnation of coconuts resulting in heavy price drops in the domestic market too. Periappan said that he used to send up to four dry containers (DC) of 40 feet per week and each with a holding capacity of 50,000 to 55,000 coconuts, which comes above 28 tonnes. But, now he had quit the export trade after incurring a heavy loss in business.

Monthly around 20 containers would be sent from Pollachi during non-peak season and exports would double up, when demand peaks.

Coir Board suggests diversification for growth

The Coir Board has suggested to farmers and units to diversify and tap the growing potential of the environmentally friendly coir products. The coir industry in Tamil Nadu, a market leader, made an exponential growth and reached up to Rs 4,000 crore of exports. In Tamil Nadu alone, the number of coir exporters rose to 1,000 from a meager 100 over the last few years. When the growth was going fast and steady, the Russia-Ukraine war and container shortage hit the sector hard. This setback is only a temporary phenomenon for two to three months and need not be worried. But, another major and looming threat is the entry of many players in the sector, who tend to compromise on quality to make some quick buck. “Many of the units adulterate coir pith with mud resulting in major quality deterioration. Therefore, the buyer’s complain that they are unable to get the desired yield of vegetables and flowers with the imported pith. Unless the prescribed quality is maintained, we may gradually lose our competitiveness in the global market,” said a coir exporter. “Though exports are down, the domestic market is booming, particularly after the Centre’s push for using coir in geo textiles, which has a great market. The need of the hour is to give more value addition and enhance quality to survive global competition and sustain in the long run,” said D Kuppuramu, Chairman, Coir Board.