The Board has also recommended a Minimum Support Price (MSP) of Rs 3,900 for milling copra and Rs 4,200 for edible copra for the 1999 season. However, sources in the Board and industry feel that the Commission for Agriculture Costs and Prices is likely to fix the MSP at Rs 3,000 per quintal for the 1999 season, Rs 100 more than the MSP fixed for 1998 season.

The CDB has also pointed out that the MSP of Rs 2,900 per quintal had little impact on the coconut oil and copra during the 1988 season and the market intervention by the procurement agencies was negligible. The Board is also of the view that any kind of import of coconut or its products or any other substitutes will adversely affect the coconut industry, trade and therefore farmers.

According to the suggestions made by CDB to the Commission for Agricultural Costs and Prices chaired by Abhijit Sen,the Board has recommended the same MSP which it had suggested for the 1988 season. The Board has decided to stick to the last year's recommendation following its findings that the cost of cultivation for coconut has remained unchanged during the year 1998. This is against the state government's recommendation to fix the MSP at Rs 4,000 per quintal.

Industry sources, however, said that the Commission is likely to fix the MSP at Rs 3,000 per quintal for the 1999 season. They said the Commission has already sent signals to the industry representatives when they briefed the Commission about the coconut situation. However, they said the Commission has given its word that it would submit its recommendation to the central government in November. This would help the central government to announce the new MSP in December itself. It may be recalled that following the inordinate delay in submitting its report the MSP of Rs 2,900 per quintal for copra during the 1998 season was announced only in June leading to crashin prices. Despite the announcement of MSP the copra price ruled much below the support level through the season.

Board is also of the view that coconut oil prices could be stabilised if the total availability of oil is maintained at an optimum level. Therefore, the coconut industry should be encouraged to diversify into new areas including coconut industries based on coconut oil.

Board has also suggested the reintroduction of futures trading in coconut oil on an experimental basis.

The Board has pointed out that from 1956 till 1971, when it was suspended by a Government order, Cochin Oil Merchants' Association was authorised to conduct futures trade in coconut oil. The Central Government had also proposed the commencing of futures trade in coconut sector also, but the decision was not yet implemented.