Just when vanaspati market is riding the crest of festival demand wave, Coconut Development Board (CDB) has written to ministry of food to make coconut oil a compulsory ingredient in vanaspati. This should be made atleast a 10% ingredient, except when the domestic oil price takes an unnatural high, urges the CDB note.
?Right now, demand-side intervention is called for on two reasons. One, the imports of Malaysian palm oil this season through Kochi port ( quantum equal to nearly 50% of coconut oil in Kerala market) is likely to trip the coconut oil prices. Two, there is coconut oil glut, because of unprecedentedly high coconut production last year in Tamil Nadu,? CDB chairman Mini Mathew told FE. Both North Indian Diwali and Sabarimala demand had failed to keep coconut oil prices at its seasonal buoyancy.
While high coconut production is good news, the domestic coconut oil getting substituted by palm oil and palm kernel oil imports was not. The Board caught on the idea of piggybacking the vanspati demand from a proposal at a brainstorming with the coconut industry. CDB has sought food ministry to go for a notification, reversible when the prices are more stable. However, that a portion of the oil used in vanaspati should be ?of domestic origin? is nothing new in India, says edible oil industry report Erik Dohlman, Suresh Persuaud and Rip Landes (USDA- Economic Research).
Till 2003, this minimum was 25%. Later this was trimmed to 12%.