COIMBATORE: After scaling a record high just six months ago, copra prices have witnessed a steep fall, leaving coconut farmers in western Tamil Nadu under financial strain.
Market prices of copra have fallen to around Rs 120 per kg from an all-time high of Rs 275 per kg in December last year, marking a decline of more than 55 per cent. The commodity had traded above Rs 200 per kg for a few months before prices began to slide.
The sharp fall has forced many farmers to look towards procurement by the National Agricultural Cooperative Marketing Federation of India (NAFED).
"Over the last three years, farmers did not sell copra to NAFED because market prices were much higher than the Minimum Support Price (MSP). But with prices crashing, they are now eager to sell to NAFED to minimise their losses," said N Thangavel, a member of the Tamil Nadu Coconut and Copra Farmers Association.
He urged the state government to provide an additional Rs 30 per kg incentive over and above the Centre's MSP of Rs 120.27 per kg, citing rising production costs.
"Labour shortages, higher wages, increased fertiliser prices and other input costs have significantly raised the cost of production. Farmers need additional support to remain viable," he said.
Farmer representatives also attributed the prolonged decline in prices to the dominance of large edible oil mills in the domestic market. "Corporate oil mills largely influence the market and prevent prices from rising. Barely 10 per cent of India's edible copra and coconut oil production is exported, while the remaining 90 per cent is consumed within the country. As a result, domestic demand and pricing largely determine the market," Thangavel said.
According to the farmers, Tamil Nadu produces an average of around 3.5 lakh tonnes of copra annually, with Kangeyam in Tiruppur district emerging as one of the state's principal production centres. However, output has declined by nearly 50 per cent, primarily because of an acute shortage of labour for harvesting, de-husking and copra processing.
Despite the current downturn, farmers remain optimistic that prices will recover towards the end of the year as the peak coconut harvesting season draws to a close and market arrivals decline.
The slowdown has also affected the copra processing industry. Tamil Nadu has around 5,000 copra drying units, nearly half of them located in Coimbatore and Tirupur districts, the state's major copra-producing belt. "Many drying units are now lying idle because of weak market conditions," Thangavel added.
State produces 3.5 lakh tonnes of copra annually
Almost 90% of copra is consumed in India; exports at just 10%
After record high in Dec, price crashed from Rs 275 to Rs 120/ kg
Copra output dropped 50% due to labour shortage
MSP stands at Rs 120.27/kg
TN has 5,000 copra drying units; many are now idle
Farmers seek Rs 30/kg state incentive