Coconut's now cheaper than egg

THIRUVANANTHAPURAM: It doesn���t need an egghead to figure out why the response has been lukewarm to Kerala government���s reward of one million rupees to anyone who invented an automatic mechanism for coconut harvesting: Coconut prices have fallen so much that distressed growers wonder if it would be worth getting the nuts down.

Time was when an egg sold for Re 1 and a coconut commanded Rs 10 but that price equation has been turned on its head, with a coconut becoming cheaper than an egg, at least in some parts of the country. That���s like a bicycle becoming more expensive than a bike but that is where market dynamics have taken the prices of coconuts and eggs.

���In some parts of Malabar, like Nadapuram, farmers have to part with coconut for as low as Rs 2 per nut while eggs sell distinctly higher,��� Sukumara Pillai, chairman of Kerafed, the apex body of co-operative societies of coconut farmers in Kerala, told ET.

Mr Pillai says the changeover of coconut growing from plantation mode to homestead growing has redrawn the economies of scale of producing the commodity and that the diminishing returns from coconut had disheartened both growers and traders.

The disinterest prevailing among growers reflected in their response to the recent copra procurement in the state by the National Agricultural Co-operative Marketing Federation (Nafed). ���Despite a comparatively attractive price of Rs 4,450 per quintal offered by Nafed, we could only procure about Rs 15,000 tonnes of copra from the state,��� says Mr Pillai.

Kerafed officials say the procurement price was not enough to influence the market prices and that prices continue to be subdued for coconut, copra and coconut oil. ���The price fall is hurting the entire sector. Coconut oil price has fallen from roughly Rs 70 per kg to Rs 45 per kg,��� Mr Pillai said.

Kerafed procures copra from co-operative societies of coconut growers but the federation has been unable to get even the requisite raw material for its own coconut oil units. This despite the fact that there are 899 primary agricultural credit societies which are counted as Kerafed members. Kerafed officials say the apathy towards coconut is so distinct that even traders and co-operative societies would much rather deal in some other commodity.

Ironically, Kerafed is facing the ire of coconut traders in the state, who allege that the federation is purchasing copra from Tamil Nadu while sufficient copra was available in Kerala.

Meanwhile, prices of eggs surged to Rs 40 per dozen in different outlets in Mumbai due to lower than expected arrivals. Coconut, on the other hand, slumped to Rs 5-6 per piece, depending on size.

Kerafed officials deny that, blaming the poor procurement infrastructure for the state of affairs. Kerafed officials say the federation is on a diversification mission, focusing on products like dessicated coconut, coconut milk and coconut cream to improve its bottomline.