Coconut prices crash on cheap Southeast Asia imports

CHENNAI: Coconut farmers have been hit by an unprecedented crisis, with procurement prices in Tamil Nadu hitting an all-time low of 3 per coconut.
“This is lower than the price 15 years ago,” said T K Jose, chairman of Coconut Development Board. Coconut prices have not increased as much as other commodities over the past decade but the current price barely covers costs.
The dip in prices has been attributed to a variety of reasons, including a lack of minimum support price, to a dip in demand for coconut oil. But farmers say the primary reason that prices have plunged is the cheap import of coconut oil cakes from Southeast Asian countries like the Philippines and Indonesia.
Almost 90% of the coconut produce is used for oil extraction. “Oil companies fix the procurement price of coconuts each year,” said R Kalaiselvan, a coconut farmer from Pattukottai and member of the Coconut Development Board. “Companies are importing coconut oil cakes from the Philippines, Indonesia and Sri Lanka and selling it here at 1 per nut. Most oil companies buy these imported oil cakes. We are being shunted out.” Kalaiselvan said the price had remained at 5- 6 per coconut for the past seven or eight years. “The only exception was last year, when production dipped, leading to speculation and an increase in procurement prices.”
“The government has not yet fixed a minimum support price (MSP) or guaranteed procurement,” said M Paramasivam, a coconut farmer from Parambikulam. “MSP will at least provide guarantee against fluctuation of prices.”
Demand for coconut oil has fallen due to dietary changes. Countries like Philippines and Indonesia have switched to manufacturing low-fat, value-added products but Indian farmers are yet to explore this.