| |
| |
Monday
Jul 24 2000
|
Coconut in cycles
S Sananadakumar
COCONUT oil prices have registered a sharp fall in the past few weeks much to the dismay of the coconut growers. This is because the remunerative prices for coconut growers depend even now on the price of coconut oil.
Though the government has notified higher copra procurement prices the steady decline in coconut oil prices still continues. Mr N Anandan, secretary, Cochin Oil Merchants Association speaking to S Sananadakumar was of the opinion that there should be a re-look on the price support operations.
This is important in the context of the new trade regime based on import liberalisation.
What is the extent of fall in coconut oil prices in recent months?
Throughout last year, coconut oil prices were ruling at relatively higher levels of Rs 55 to Rs 65 per kg.
In January 2000, the price stood at Rs 5,400 per quintal for coconut oil and at Rs 3,600 per quintal for copra. From this level, it has now come down to Rs 3,025 per quintal for coconut oil and to Rs 2,100 per quintal for copra by July 5.
As against this, the support price for copra was fixed at Rs 3,250 per quintal. On the other hand, at present the open market price of copra is at around Rs 2,100 per quintal which is Rs 1,150 less that the support price level.
The open market price of coconut oil is presently Rs 225 less than the support price level of copra.
What are the reasons for price fall?
Earlier coconut oil was consumed in large quantities for edible purposes in states like Kerala. But nowadays though the production is high the consumption for edible purposes is low.
The reason for this is the rise in consumption of palmolien. The major oil consumed in the state is palmolien as per the latest figures. The reason for this shift in market preference is the expanding middle and lower class preference for palmolien and the increasing demand from the hotel and bakery industry.
Moreover, palmolien price which stood at around Rs 35 to Rs 37 per kg in 1999, has come down further to Rs 25 to Rs 27 per kg.
What has been the official response to the problem of price fall in coconut oil and in coconut?
Market intervention agencies like Nafed are spending crores of rupees for the procurement operations and to safeguard the interests of the coconut growers.
Nafed might have spend at least Rs 150 crore for procuring 45,000 tonnes of copra. If they sell copra at the present level, the loss would be around Rs 55 crore. If they convert it into oil the loss would be even more.
What is to be noted here is that even the support price announced by the government is not realised by the coconut farmers but is cornered by middle men.
Do you mean to say that the copra procurement policies has not helped the coconut plantation economy in lifting the price?
Price support and market intervention is definitely not a healthy practice. Such interference would further distort the trade and industry. We should analyse whether the present type of procurement operations under the support price scheme should continue or be replaced by other alternative schemes giving wider options to farmers to sell produce at the best price and to prevent fall in prices.
What are the specific measures that you suggest to lift the prices?
We have pointed out that the import of palm oil/palmolien should be banned or the import duty on this should be raised.
Restrictions on the export of coconut oil should be removed and finally the central government should direct the soap and vanspathi manufacturers to use certain percentage of coconut oil in these sectors compulsorily. At present the use of this oil in these sectors is negligible.
What are the long term measures that you advocate?
Because of cyclical nature of coconut production in various coconut producing states and due to high volatility in prices due to production cycles it is important that a price discovery mechanism through introduction of futures trading in copra and coconut oil is necessary.
Since we have to meet the challenges of the new trade regime in the post 2001 period, it is time that we looked into the agriculture sector in totality.
|
|
|
|
