NEW DELHI: Coconut oil prices in India have surged 300% over the past year, prompting the country’s top oilseed association to urge the government to allow imports to stabilise the market.
Farmers are reporting yield reductions of up to 40% as coconut production has declined over the last two years, while demand has risen sharply. The drop in production has been attributed to severe heat between March and May 2024, along with pest attacks that have affected the health of coconut trees and disrupted supply this year.
At the wholesale level, coconut oil prices have crossed Rs. 400 per kilogram, compared to around Rs. 130 per kilogram a year ago. Kerala, a key consumer market, is reportedly showing signs of turning away.
The Solvent Extractors’ Association of India (SEA), an oilseed extraction traders' body representing the vegetable oil industry and trade in India, said in a statement that the coconut oil sector is currently in turmoil, with prices having tripled in the past 12 months.
“We request the Government to take urgent actions to address this situation by allowing imports of Copra and Coconut Oil Price for Interim Period,” said Sanjeev Asthana, President of SEA, in a letter to the Government of India.
The SEA further stated that import concessions should be allowed for an interim period of 6–12 months, with the sole objective of managing the current demand crisis and retaining consumer interest in coconut oil.
According to the letter, interim measures would not impact domestic coconut growers. “This measure is not likely to impact farmers in any way adversely; rather, this will stabilise prices and will be helpful for farmers in the long term,” states the letter.
The SEA noted that soaring prices may drive households towards alternative oils such as palm and sunflower. It also warned that adulteration is becoming increasingly prevalent due to rising prices, and trust in coconut oil is beginning to erode. “The current situation is impacting all the stakeholders in this sector adversely,” said Asthana.