Coconut oil may not gain from ban

The move to ban the import of palm oil through the Kochi port may not provide relief for the coconut oil sector, reeling under falling prices.

Speaking to Business Standard, Kerala's Finance Minister Thomas Issac said the move might give a minor advantage to the coconut oil sector, but would not help to increase the prices.

The Kerala government had repeatedly pressed for a ban on the import of palm oil through all the south Indian ports, forcing the Director General of Foreign Trade (DGFT) to ban the import of crude, refined palm oil and palm kernel oil and its fractions through the Kochi port by a notification on Tuesday.

Other than Kochi, palm oil is being imported through other major ports such as Chennai, Tuticorin and Mangalore. According to the minister, only a ban covering all these ports can have a serious impact on the demand for coconut oil.

"Of course this will be a relief for coconut growers, but not enough to solve their crisis. It is a long pending demand of the state government to ban palm oil imports through all the south Indian ports," he said, adding that the government would press for the same.

Around 100,000 tonnes of palm oil have been imported annually, on an average, through the Kochi port over the last five years. In 2006-07, 90,000 tonnes were imported, with a maximum of 150,000 tonnes in 2005-06.

M J Kuriakose, president, Cochin Oil Merchants Association (COMA), said the coconut oil price had dropped to Rs 4,400 a quintal and the ban order could stop further depreciation in prices.

While he wanted the import ban to be extended to at least all the south Indian ports, he said the present move may not be enough to bail out coconut farmers and oil producers in the state.

With the production season in full swing, currently, in states like Tamil Nadu, the coconut oil supply is abundant and the market is in a strong bear mode.