High Coconut Prices Scaled Back India’s 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 Rs2,000-crore ($301 million) mark this year against Rs2,300 crore ($346 million) registered in FY17, according to BusinessLine datelined Cochin, May 09. Export of value-added coconut products as on February was only Rs 1,600 crore ($241 million) a 20 per cent drop, Coconut Development Board 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 tons but this year it was reduced by one-fourth. The export of DC powder, which was around 15,000 tons in 2016-17, has also come down considerably.  Overall, there has been a 50 percent drop in export quantity of all products  except coconut shell based activated carbon. The loss of competitiveness 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.