Onam fails to cheer coconut oil industry

Ajayan in Kochi

Contrary to expectations, the festive season of Onam has failed to help the coconut oil industry in Kerala. Even on the last day of trade before Onam, there was no transaction in the oil market here. This is despite the comparatively higher price of palm oil. While palm oil sold at Rs 37-28 a kg, coconut oil was traded between Rs 34-35. Cochin Oil Merchants Association sources said that the price of coconut oil ruling a shade below that of palm oil did not help the industry. Palm oil flowed through the State and people who were accustomed to tastes other than that of coconut oil rejected it despite the lower price. Even major bakeries selling chips did not go in for coconut oil. Sale of coconut oil remained mainly individual and there was very little institutional buying.

Meanwhile, the Solvent Extractors Association said that India had emerged as the largest importer of edible oils, posing a big threat to the domestic oilseeds sector. Association president Sandeep Bajoria said it was important that the Centre raised considerably the duty on import of edible oils and saved the farmers and the domestic industry. During 1999-00, over 47 lakh tonnes of vegetable oils were imported. This accounted for nearly 45 per cent of the total edible oil consumption. The situation would be worse in 2000-01 year as nearly 50 lakh tonnes of oil was expected to be imported. This is in direct contrast to the situation in the domestic industry. Oil seeds production was expected to be 23 lakh tonnes lesser at 186 lakh tonnes. Many of the oil mills in the country were forced to close down as the processing capacity had fallen from 30.3 million tonnes in 96-97 to 23.5 million tonnes this year. It was a case of deficit as far as the oilseeds sector was concerned compared to the rice or wheat, he said.

To face the situation, the Association had readied a self-financing diversification programme whereby people would be encouraged to shift to oilseeds cultivation. As per the scheme, Rs 2,000 per hectare would be available to farmers switching over to oilseeds cultivation. The Association has also urged the Centre to establish an oilseeds and oil development fund.