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Coconut price set to continue southward trend

Published: 31st July 2012 01:11 PM  |   Last Updated: 31st July 2012 01:11 PM   |  A+A-

Giving further jitters to coconut farmers in the state, the Agricultural Market Intelligence Centre (AMIC) of the Kerala Agricultural University (KAU) on Monday predicted that the price of coconuts will continue to remain subdued in the next three months.

In its latest bulletin, the AMIC said coconut prices are likely to come under more pressure once the festival demand, on account of Onam, wears off owing to abundant supply and the downward operation of the price cycle.

The price range of partially de-husked coconut which is now at `14 per kg, is likely to prevail during the next three months. With increased commodity flow expected from Tamil Nadu and Karnataka in the next few months, prices may decline further.

 Any upward change in the present scenario can be triggered only by vigorous procurement of coconut and copra by the designated state agencies. The prices of coconut have been on the wane since the first half of the new season, which commenced from January 2012.

The AMIC had conducted a study against the backdrop of small growers holding back their stock in the hope of a better price scenario in August, on account of the festival demand. It noted that Kerala, Tamil Nadu and Karnataka together account for almost 84 per cent of the total coconut production in the country and the price trend of this strategically-important  commodity has a direct bearing on majority of the coconut growers in these states, with those in Kerala being affected severely.

Based on an econometric analysis of monthly prices that prevailed in the market over the last 13 years, and market surveys, the AMIC has found that the prices may continue the downward trend for the next three months, due to the widening gap between stagnant demand and increased availability.  Accordingly, the price of partially de-husked coconut, which hovers in the range of `14-`16 per Kg in August, is likely to come down to `12-`14 in September and hit a low of `10-`13 per Kg in October.

Globally, Indonesia ranks number one in terms of the total acreage of coconut cultivation, with an overall of 385 million hectares, followed by Philippines and India. India produces nearly 15,730 million nuts annually, which is second only to Indonesia’s 16,498 million nuts.  India consumes 95 per cent of its net output, while Indonesia’s consumption is pegged at 60 per cent of its net output.

Coconut oil remains the most predominant form of consumption. The European Union Group of 27 countries is the largest consumer of coconut oil in the world, currently utilising some 7,43,000 metric tonnes per annum.  The economic slowdown in the Euro zone has also taken a toll on the global coconut oil market.

Though the global price signals of the prime substitute oil- palm oil- are also indicating a southward trend in the next three months, the projected hike of 15-20 per cent in production of coconut in the three major producing states and the consequent availability of nuts and copra will be the biggest impediment to better coconut prices during Onam.

Meanwhile, the mounting edible oil imports to contain price rise during the festival season may also hurt the prospects for coconut oil.

Vegetable oil imports show a jump of more than one lakh tones (24.65 per cent increase), whereas the import of refined palm oil has more than doubled during the corresponding period.



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