Business

Copra fails to keep pace with coconut

Kochi: Despite coconut production recording encouraging growth levels, there is a paradoxical situation of short supply of copra in the State. The Kochi-based Coconut Development Board (CDB) feels that unless farmers and processors are brought closer, vibrant growth will continue to elude this vital sector of the State’s economy.

Chairperson of the Coconut Development Board Minnie Mathew feels that shortage of copra is due to the rising demand for coconut from various quarters including the desiccated coconut powder sector, confectioneries segment, cosmetic industry, pharmaceutical applications and vanaspati industry.

Millers say that coconut production has increased but there is acute shortage of raw material for running their units profitably. At the household level in Kerala, there is an increased demand for coconut as well as coconut oil.

At one point of time, palm oil was selling at a premium over coconut oil, thus contributing to the increased demand for coconut oil. CDB sources here say that while this surge in demand is good news, it is largely price driven.

The absence of strong forward and backward linkages has been a serious impediment. The milling industry has to work backward with the growers to streamline the supply chain and achieve cost competitiveness and quality consciousness. The chairperson says that some leading millers have already taken initiative in this direction by opening a chain of collection centres in primary producing areas and fixing the quality specifications of copra. This trend has to be further strengthened.

She says that the CDB’s cluster programme has created a platform for the farmers in a neighbourhood to pool their produce and create marketable surpluses. Millers should take advantage of the clusters in their areas and achieve the much needed backward integration.

This will be mutually beneficial to the farmer and the processor. If farmers have an assured market, they will feel encouraged to invest in the crop and improve productivity. By starting collection centres in the clusters, processors can eliminate intermediaries and receive uninterrupted supply of quality raw material and at competitive prices. Coconut oil is vulnerable to substitution and the threats on the horizon cannot be ignored, warns Ms Mathew, but hastens to add that there are also opportunities, which if seized at the appropriate time, will lead the industry on to a higher trajectory of growth.

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