KOCHI: As Keralites start preparations for Onam celebrations, the rising prices of essentials, especially coconut and coconut oil, are worrying families. The price of coconut oil which hovered around Rs 160 per litre a year ago has crossed Rs 500, making it out of bounds for common man. Coconut oil has been deeply ingrained in the state’s culture and traditions that it is an inevitable ingredient for its traditional cuisine.
Meanwhile, the sale of other products like groundnut oil and palm oil has increased as coconut oil has become unaffordable. There are reports that adulterated coconut oil is flooding the market posing a health risk.
Kerafed, the largest producer of coconut oil in the country has hiked the price of coconut oil to Rs 529 per litre while the price of many popular brands has crossed Rs 600. The price of coconut in the retail market ranges between Rs 75 to Rs 85 per kg.
“There will not be any scarcity of coconut oil during Onam season as we have maintained an average stock of 912.2 metric tonnes of copra from January to June,” said Kerafed managing director Saju Surendran.
Farmers say they get an average price of Rs 62 per kg, which is a bumper price considering the fact that the procurement rate was just Rs 8 per kg a couple of years back. Though the steep rise in procurement rate has brought cheers, farmers are unable to reap the benefit as the production has declined to a fraction of the previous year yield.
“The coconut prices have gone up due to drop in production caused by drought in 2024. Now the production has started increasing thanks to copious rains in the previous months. The crisis is expected to end by December 2025 and the prices may decline thereafter,” said Dinesh a farmer in Palakkad.
“There has been a steep decline in coconut production which has affected our business. We have rescheduled the production to a single shift due to shortage of coconut. The company has not exported coconut oil for the past two months.
There are many reasons like the spike in demand for desiccated coconut powder and coconut milk in the USA, rise in demand for tender coconut in North India and West Asia and the dip in production,” said Varappetty Cooperative Society president M G Ramakrishnan.
The rise in price of coconut oil has pushed the catering and bakery industry into crisis as they are not able to compromise on quality and pricing due to stiff competition.
“We purchase around 1,000 litres of coconut oil per month and the price hike has brought an additional burden of Rs 3 lakh. We are unable to hike the prices due to competition. Coconut and coconut oil are important ingredients that decide the taste of the Sadya and we cannot shift to cheaper products,” said All Kerala Caterers Association treasurer M G Sreevatsan.
“The price of coconut oil has crossed Rs 500 per litre and we are forced to increase the price of banana chips. The price of chips has increased from Rs 428 to Rs 560 per kg during the past two months,” said K S Rajendran of Kalarickal Chips and Spices in Alappuzha.
Refuting allegations that spike in procurement of coconut by China is the reason for the scarcity, sources at the Coconut Development Board said production has dropped in all coconut producing countries. “China procures coconut from Indonesia as the prices are half that of India. But the situation is gradually changing as production has increased in the past two weeks. Prices will start stabilising now and will normalise in another two months,” said an official.