High raw coconut prices shred exports of value-added products
The high price of raw coconuts seems to have made a dent on India’s coconut product exports and the figures are unlikely to cross the ?2,000-crore mark this year against ?2,300 crore registered in FY17.
Export of value-added coconut products as on February was only ?1,600 crore — a 20 per cent drop, CDB officials said, citing the rising price of raw coconuts in the domestic market as reason for the decline in export competitiveness.
Though the higher prices of raw nuts were remunerative for farmers, low production across the growing regions have dampened their hopes. The high prices also hit exports of desiccated coconut products and coconut oil.
Coconut oil exports last year was around 35,000 tonnes and this was reduced by one-fourth this year. The export of DC powder, which was around 15,000 tonnes in 2016-17, has also come down considerably. Overall, there has been a 50 per cent drop in export quantity of all products except coconut shell based activated carbon.
The loss ofcompetitiveness in the export market also affected several coconut based industries and only a select few — who are concentrating in coconut oil shipments — have taken advantage through copra imports under Advance Authorisation Scheme.
Pinning hopes on a policy change, oil millers sought permission to import copra on actual user condition (for industrial purpose). However, a meeting at the secretary level in New Delhi came with a rider to get feedback from producing States before moving ahead.
As such a move could hit farmers, it would be a challenging task for governments to take a favourable decision due to political compulsions, felt those associated with the industry.
Ganesh Kamath, Partner, Vittal Agro Industries Ltd, Kanjangad, told BusinessLine that India’s coconut products have become highly uncompetitive in the international markets. Besides a drastic fall, exports are now on a stagnant level, resulting in piling up of stocks. He pointed out that the DC powder from Vietnam and Indonesia are now available in the international market at $1,650/tonne, whereas the Indian product is priced at $3,000.
However, he hoped that raw nut prices will soon start softening in the wake of diminishing demand due to declining exports. “The sector is expecting a good crop this year, thanks to widespread pre-monsoon showers in many growing regions,” he added.