Coconuts Have Become Too Expensive to Break as Prices Swell on Great Demand

01 Feb 2018

New Delhi: Ever wondered why the waiter wasn't giving you a second helping of coconut chutney to go with your Dosa? It is probably because prices for the nut have spiked over the past few months.

The price of a coconut at a local grocery store in Bengaluru ranges from Rs 35 to Rs 38, whereas it sells for Rs 44 on online grocery platforms like Big Basket.

For home-maker Rema Rajeevan, a native of Kerala who is settled in Bengaluru, the increasing prices of coconut is changing the consumption of their staple coconut by her family. "We just returned from Kerala so we got coconuts from there. I can’t afford to buy it regularly from the local market as it has become too expensive," she says.

While homemakers and restaurant owners are feeling the pinch, the soaring prices have made coconut producers a happy lot.

"Coconut production in many states has come down but the demand for coconut products is increasing. The increasing prices will definitely benefit coconut farmers" says Swamy, assistant marketing manager at the Karnataka Coconut Development Board.

South Indian states produce close to 85 per cent of the coconut production in India, with Tamil Nadu being a major producer and exporter. "Coconut and its varied by-products are seeing very good demand from European and gulf countries, pushing the export numbers for products like desiccated coconut and virgin coconut oil higher,” Swamy added.

This increase in export demand could be the reason for the supply shortage being felt in many states.

As more non-conventional, non-edible uses of coconut increase, the local nariyal paani wala isn't benefiting much either.

Murugeshan, a coconut vendor in Chennai used to buy 200 coconuts for 2 days and would spend close to Rs 5000 in September 2016. Today, the same costs Rs 7000. He now sells a refreshing nariyal paani for Rs 35, which would earlier sell at Rs 20. The higher prices are fetching fewer customer and a lesser profit margin for Murugeshan.

In God's own country Kerala, prices for coconut and coconut oil have hit an all-time high. A kg of coconut is being sold at an average of Rs 51 as compared to Rs 21 two years ago. Prices in Kerala for coconut and coconut oil have also increased, with the latter being sold at a staggering Rs 260 per kg in the market.

As of January 30, branded coconut oil was being sold at Rs 280 per kg, whereas KERA (State Public Sector Unit) was selling coconut oil for Rs 250 per kg. Oil sold by private company KLF Nirmal was prices at Rs 225 per kg.

The ongoing Sabrimala season has also contributed to the steep rise in prices as the demand for raw coconut shot up.

In the last five years, the price of coconut oil has grown by almost 300%. According to the Department of Economics and Statistics, government of Kerala, the price of (unbranded) coconut oil as on January 30, 2013, was just Rs 74 per kg, which is now at Rs 230 per kg on an average. In 2016, the same oil was being sold for Rs 100. In 2017, it was priced at Rs 150.

The price of coconut, per kg, was Rs 21 in 2016, which rose to Rs 34 in 2017. Production wise, the state regained the top spot from Tamil Nadu last year. As per statistics available with the Coconut Development Board, in 2016-17, Kerala produced 746.42 crores nuts while Tamil Nadu produced 617.07 crores nuts. Karnataka was placed at 512.88 crores nuts. The year before, in 2015-16, that Kerala was third in terms of production with 489.66 crores nuts.

“The demand of by products has increased. Be it tender coconut, virgin coconut oil, domestic consumption has increased. Even the exports,” said Thalath Mahmood, Director, Cochin Oil Merchants Association (COMA). Indeed, according to government data, exports in 2015-16 were worth Rs 1451 crores. It shot up to Rs 2028 crores last year.

Mahmood, however, added that the high prices had given rise to adulterated oil in the domestic market. The association has approached the Kerala High Court in this regard too.

Meanwhile, in Goa, where coconut is a core ingredient for the local cuisine, reports suggest that the government is said to be mulling options of importing coconuts from Sri Lanka in order to meet the increasing demand.


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