Expectation of higher arrival of coconut during April-June period coupled with duty-free import of palm oil will keep coconut prices down in the coming few months.
Traders said coconut farmers are expected to sell the harvested nuts to avoid decline in prices in the market because of supply overhang. Although only 35% of the coconut produced in the country was used for oil extraction, the entire coconut-based economic activities are dictated by the price of oil.
Coconut oil prices are directly influenced by palm oil import. With expected fall in prices, Domestic and Export Market Intelligence Cell (DEMIC) attached to Tamil Nadu Agricultural University (TNAU) has advised the farmers to sell harvested nuts immediately.
According to DEMIC?s report, the farm level price for coconut will hover in the range of Rs 4.25 to Rs 4.80 per nut during April-June period. There is no scope for increase in prices up to June, the report added.
However, the DEMIC said demand for tender coconut will increase during summer months. But tender coconut?s share in the total coconut production is minimal.
Around 47% of the total coconut production is used for edible purpose, 35% for coconut oil, 11% for tender coconut and 7% for edible copra.
According to Solvent Extractors Association (SEA) of India, the country is expected to produce 6.6 lakh tonne of copra in 2009-10 while coconut oil production is expected to increase by 1.5% to 4.3 lakh tonne.
India is ranked number one in terms of coconut productivity with 8,165 nuts per hectares, according to statistics available with Asia Pacific Coconut Community (APCC).