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Copra prices surge to record on lower arrivals

Wed Feb 24 2021

 

Copra prices have surged to a record ₹140 a kg following lower arrivals of raw coconuts despite the harvest season having begun in Kerala.

 

As a result of the spike, not seen after August 2017, coconut oil also increased in the domestic market with prices topping ₹230 per kg in retail outlets. Wholesale prices hit ₹220, forcing consumers to shift to cheaper edible oils.

 

MSP hike

 

Traders said rising demand for raw coconut ahead of Maha Shivarathri also aided the price rise. A hike in the minimum support price (MSP) by the Centre has come handy, too.

 

For this year, the MSP for milling copra (fair average quality) has been increased to ₹10,335 a quintal, up ₹375 over last year, while for ball copra it has been raised to ₹10,600, a hike of ₹300.

 

Traders allege that the spike in coconut oil prices is leading to adulteration in retail outlets. The clandestine activities are encouraged by lower prices of cooking oils such as palm oil, sunflower oil and soya oil which are ruling between ₹130 and ₹160 a kg.

 

On the other hand, trade sources said that Kerafed, the biggest procurement agency for copra in the State, has begun hiking the procurement price on a daily basis without any valid reason.

 

This, in turn, has facilitated dealers to hold the crop anticipating further hike in the rates, causing shortage.

Arrivals decline

 

Ubais Ali, Executive Director, Mezhukkattil Mills, told BusinessLine that arrival of raw nuts was below expectations and has not yet picked up despite the commencement of the harvest season this month.

 

Extended winter in many parts of the State has also impacted arrivals, which will likely pick up from next month.

Rising export demand

 

Export demand for raw nuts is rising following growth in desiccated powder and other value added products. But the spike in domestic copra price might hamper export demand.

 

Official sources put Kerala’s coconut oil consumption at around three lakh litre per year. Copra price in the overseas market is ruling at $1,200 (₹86,800) per tonne against $900 (₹65,100) last year.

 

Coconut oil exporters are facing difficulties in importing copra following higher prices, container shortage, rise in shipment rates.

 

Copra prices, according to official sources, are likely to increase further due to supply constraints. The production is lower in all the major coconut growing states with a 5-10 per cent decline because of climatic factors, white fly infestation which is prevalent in all southern states. The second advance estimate of 2019-20 pegged all-India coconut production at 14.69 million tonnes compared with 14.73 million tonnes the previous year.

 

Source: www.thehindubusinessline.com

 

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