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Our Bureau

`Coconuts be priced independent of coconut oil'

Kochi , July 17

Given the fragile conditions prevailing in the coconut oil industry, the State Government and the Coconut Development Board should take appropriate steps, according to industry sources.

Special package

The Government should come out with a special package to sustain the industry in the land of coconuts and also to prevent further fall in prices of coconuts and copra, they said.

Though copra is made out of coconuts and coconut oil from copra, the price of coconuts and copra is fixed on the basis of prices of coconut oil in the wholesale markets, Mr N Ananthan, former Secretary, Cochin Oil Merchants Association (COMA) told Business Line.

Talks about value-added products, bi-product utilisation, product diversification etc may sound attractive but they cannot be taken for granted under the present circumstances. The concept of fixing the price of coconuts on the price of coconut oil needs to be changed, he said.

It is a fact that coconut products gain price and value up-gradation as they pass through market channels. But the farmers are not getting the dividends of this value up-gradation to the desired extent. As such, the coconut-based economy in the country is mainly dependent on a single coconut product - coconut oil.

Dwindling demands for coconut oil from North Indian markets due to competition from Tamil Nadu and also due to the wild fluctuations in coconut oil prices during season and off-season have almost crippled the industry.

Disparity in the prices of copra and coconut oil, unscientific method of transaction and an irrational tax structure imposed by the State Government had forced some more units to close down leaving only about 700-800 units in the early 90s. Currently, there are only around 400 units.

In spite of being a marginal producer of oil seeds - only copra - the milling industry in the State maintained its existence during these years. Though the rotaries had given way to expellers, the milling industry by and large has been very inefficient.

Modern technology has not been introduced for crushing copra and up-gradation of end products and reduced cost of production etc have not taken place in this industry during these years.

Tax issues

The present tax on copra and coconut oil under VAT is a waste and the Government has not benefited in any way. Collecting in-put tax on copra and refunding the same by collecting out-put tax from sale of coconut oil has not helped the industry either. Therefore, it should be abolished forthwith, Mr Ananthan said.

More Stories on : Coconut & Copra | Kerala | Oilseeds & Edible Oil

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