Copra prices crash by 31% over last six months in state

Copra prices have fallen by 31% in the past six months in Karnataka. Poor quality of copra due to rainfall, price manipulation by middlemen and increased import of palm oil have kept the price of coconut and related products low, say farmers and experts.

Shreeharsha from Thimlapura village in Hassan district says at this time last year a quintal of copra fetched Rs 17,000 to Rs 18,000 in the market. This price has dropped to Rs 11,000 now. “Procurers and middlemen say that the quality of copra has come down due to moisture. This was true in October and November. Copra quality has improved due to sunny weaher now, but prices have not,” he says.

Karnataka is the third largest producer of coconuts in the country after Kerala and Tamil Nadu. India produces 34% of the world’s supply of coconuts. A total of 12 million people depend on coconut farming for their income in India.

Many farmers who depend on coconut cultivation have been impacted. One coconut plant requires Rs 5,000 inclusive of fertiliser, labour and transport charges annually. Each tree produces 300 coconuts. “This means we are making a loss of Rs 5 to Rs 6 per coconut since the price is currently only Rs 10 to Rs 11,” says Anil Kumar from Kittadal village, Chitradurga district.

A consistent dip in the prices over three weeks makes farmers eligible for subsidy of Rs 1,000 per quintal from the state and central governments. “However, even if the price rises marginally, we do not get the subsidy,” says Kumar. For the past six months, farmers have not received any subsidy.

While inconsistent and surplus rainfall has affected coconut farmers, Anekatte Venkatesh from the Coconut Growers Association explains that price manipulation through stockpiling could be behind low prices as well. “Coconut growers face a lot of trouble from middlemen. The price of coconuts is actually much higher than the minimum support price, but they maintain it around MSP,” he says.

J D Kadregouda from the state agriculture department claims that the government would, “only procure in the event where copra prices fall below the MSP,” he says.

Another major factor that affects the market for coconut is the import of palm oil, says Prakash Kammardi, former Head of the Department of Agricultural Economics at the University of Agricultural Sciences. Palm oil has the lion’s share of edible oil imports in India.

“Both coconut oil and palm oil are used to produce a derivative called lauric acid. Due to the low price of palm oil, which is subsidised, coconut oil loses out on a potential market,” says Kammardi. Lauric acid is used in the production of soaps and a range of other cosmetics.

He says that even when there is a surplus of coconut oil, India continues to import palm oil. “There is no coordination between the state and the centre as export duty is on the Union List. Trade policies are also consumer-centric. There needs to be a balance between producers and consumers. For that to happen, trade policies should be on the concurrent list,” he says.