Copra procurement likely to begin soon

The Kerafed, a nodal agency of the Nafed, may commence procurement of copra in a week or two, according to a top official of the apex cooperative organisation. A likely early procurement plans of the government agency have come as a relief to copra traders and farmers, who have been hit by a bearish market.

"We hope the market intervention can commence as early as possible and we are awaiting the government order in this regard. The government may issue the order this week itself to commence the procurement from the next week," the official said.

It is also learnt that the government is reluctant to notify the Kerala State Co-operative Marketing Federation (Marketfed) as the nodal agency for the copra procurement, as there were a lot of irregularities in its operations a couple of years ago. The federation had been barred from market intervention operations in the last season too, leaving the Kerafed as the only nodal agency to procure copra in the state this year. In the last season, the Kerafed had bought around 3,500 tonne copra through primary cooperative societies.

The central government has enhanced the minimum support price (MSP) for milling copra to Rs 3,620 a quintal, up by Rs 30 over the MSP in the 2006 season. However, a section of the Kochi-based traders feel the procurement may be delayed, as the government is yet to take a decision in this regard.

Meanwhile, with the production season in full swing, prices of both copra and coconut oil have dropped further. The spot prices of coconut oil at the Cochin Oil Merchants Association were around Rs 4,700 a quintal, lower by Rs 50 over the last week's prices. The spot prices of copra have also dropped to Rs 3,125 -3200 and the current market parameters indicate a further fall in prices in the coming weeks.

Leading dealers attributed the drop in prices to higher production in all the four south Indian states, except Kerala. In Thrissur, one of the major markets for coconut oil in Kerala, the price has dropped to Rs 4,575 in the last few days. The futures market is also bearish, with the prices of April, May and June contracts for coconut oil hovering below Rs 4,400. Only the July contract indicates a price above Rs 4,400.

Market sources predict further lower prices for copra and coconut oil between April and June. It is estimated that Tamil Nadu will have a steep rise in production this season, which is set to reach its peak in the next four weeks. Traders in Tamil Nadu currently offer oil at Rs 4,750 for delivery to major locations in Kerala. A chunk of dealers expect a drop by Rs 300-400 a quintal for coconut oil in the next 4 to 6 weeks.

It is estimated that Kerala would have a total production of 400 crore nuts in the current financial year, a drop of 150-200 crore due to various reasons such as old trees and infestation of diseases. But, the production in Tamil Nadu, Karnataka and Andhra Pradesh will be higher in 2007, as the productivity is much higher in there.

Meanwhile, there is a manifold increase in the consumption of tender coconuts, thanks to extreme summer heat in most parts of south India. The upsurge in consumption of tender coconuts that constitute around 15 per cent of the total production has given relief to coconut growers, especially in Tamil Nadu, with each coconut fetching Rs 8 to 10 on an average.