Coconut firm as output falls

A decline in production has brought good tidings to coconut farmers as prices of coconut oil have firmed up.

Coconut closed at Rs 6,850 per quintal last week. Prices were expected to rise further increase following seasonal festival demand.

Traders said the price could go up to Rs 7,000 per quintal by first week of August and hold steady at that level as the demand from branded coconut oil and cosmetic industries for the oil continues to be strong.

The heavy monsoon in Kerala since June 2004 has affected production of good quality copra. This pushed up prices, which had dipped to Rs 4,500 per quintal after peaking six months ago at Rs 7,400 per quintal.

The development comes soon after a recent meeting by the agriculture ministry officials, in which they took stock of the high production cost of coconut and coconut derived products.

The officials said contract farming, integrated cropping, product diversification and consolidation were urgently needed to restore the competitiveness of the Indian coconut sector.

Inaugurating the national seminar on 'Strategies for enhancing competitiveness of coconut industry,' Radha Singh, secretary, Union ministry of agriculture and cooperation, urged coconut farmers to form tie-ups with agribusiness firms for inputs and assistance to increase yield. This would also bring down costs per tonne of production.

Cost reduction had become crucial for industry now, as 85 per cent import duty on coconut oil imports and other restrictions would have to be phased out in the near future.

This would render the Indian coconut and derived products uncompetitive, she warned.

She pointed out that while copra was traded at just Rs 1,366 a quintal in the international market, it was being sold at over Rs 3,600 a quintal in the Indian market by domestic producers thanks to protection of growers.

Further, substitutes like palm and sesame oil too were available at far cheaper rates. India accounted for 22.34 per cent of the world's coconut production.

India faced competition in the global market from Sri Lanka, Malaysia, Ivory Coast and the Philippines.

Contract farming had made inroads for other horticulture crops like gherkin and soya. But coconut has been ignored till now.

Besides the yield, she said, contract farming through consolidation of holdings would go a long way in fighting mite and other diseases.

Warning the Indian coconut sector that it would come under pressure, she urged the Coconut Development Board to go in for a research and extension program.

The technology mission on coconut had received a Rs 53 crore allocation during the 10th Plan period. The funds were available to overcome problems and increase yields.

Other delegates at the seminar said over Rs 30 crore had been left unutilised. Research laboratories should be allowed to access the funds to develop drought resistant varieties.

Micro-irrigation methods like drip and sprinkler spraying would also have to be devised. This would help the sector as 90 per cent of the 19 lakh hectares under coconut was rain fed crop land.

Coconut growers from Karnataka, Andhra Pradesh, Tamil Nadu and Kerala participated in the seminar, organised by the Coconut Development Board.

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Bullish trend

• Coconut closed at Rs 6,850 per quintal last week and the prices are expected to rise further
• The prices are expected to touch Rs 7,000 a quintal in the first week of this month
• Heavy showers in Kerala was the reason for the bullish trend