INDIAN EXPERIENCE by VT Markose Abstract Till 1975, Import of Copra Or
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DOMESTIC MARKETING OF COCONUT PRODUCTS - INDIAN EXPERIENCE by V.T. Markose Abstract Till 1975, import of copra or coconut oil into India in substantial quantities was a regular feature. During the eighties, the quantum of import of coconut products into the country declined considerably. During the last 5 years, the import has been quite insignificant. Except for the by-product-coir, all other major coconut products such as copra, coconut, desiccated coconut and coconut oil do not figure in the export of coconut products. Domestic market for coconut products is so vast that demand for coconut and coconut products is country-wide in spite of the fact that concentration of the crop is confined to the littoral states in the country. Domestic market for coconut products consists of a chain of intermediaries such as village merchants, commission agents, brokers and wholesalers or dealers, especially for the trade in coconut, copra and coconut oil. Of late, there is a tendency to bypass the intermediaries in certain fields so that the farmers are assured of remunerative price for coconut. This is all the more significant in the case of the major coconut growing state in India, namely Kerala, where processing of coconut to copra or the trade in copra is organised through village co-operatives formed for this purpose and the co-operative market the produce to the apex body namely, KERAFED, a Government Agency which operates in such as way that the farmer is protected against crash in coconut prices. Price stabilization measures such as * * Chief Coconut Development Officer, Coconut Development Board, Cochin, India. 104 open market intervention by the Government agencies is often resorted to during the peak harvesting season to protect the interest of the farmers. Coconut oil price is highly sensitive to demand supply situations and often exhibits violent fluctuations. As 90% of the production of milling copra is concentrated in Kerala, production of coconuts in a particular year in Kerala, distribution of imported edible oil, particularly palm oil in the State, and the overall availability of other edible oils in the country,influence the coconut price level to a consider able extent. The future of coconut industry presents a rosy picture. Production and productivity levels show perceptible improvement. For the year 1990-1991 production level has attained the figure of 9,700 million nuts and in all likelihood it may touch 10,000 million mark by 1991-1992. Need of the hour is to accomplish product diversification either by transfer of technology or development of indigenous technology so that the new products could even tap the export market. Such a situation warrants a new orientation to the present marketing system so as to explore new markets outside the country. Introduction of coconut oil in consumer packs on a large scale, manufacture of desiccated coconut and coconut cream in sizable quantities, etc. would go a long way to stabilise the coconut prices at remunerative level to the coconut growers, processors and traders. Coconut, an important oilseed crop of tree origin grown in India, commands a unique position as a source of food, drink, shelter and vegetable oil. On the edible oil sector, seven percent of the total consump tion is shared by coconut oil and hence coconut has been declared as an oilseed by the Government of India in 1990. Coconut cultivation, trade, processing, and indus trial activities generate employment opportunities to 15 million people in the country. Coconut is a poor man’s crop in India because small and marginal farmers are the major participants in coconut production. About 5 105 million farm families depend on the crop for their livelihood. The contribution of the crop towards the national income is to the extent of Rs.35 billion or 1.4 billion USS. Export of coir and coir products earn foreign exchange to the tune of Rs.627 million annually. Coconut, the cultivation of which is concentrated mainly on the coastal tracts in India, enjoys widespread acceptance and countrywide consumption. With the production of coconuts touching 10 billion nut mark a year, India, the third largest coconut growing country in the world, may have to resort to imports in certain years to meet the internal demand. Barring coir and coir products,almost all other coconut products produced within the country fall slightly short of the internal requirements. Almost the entire coconut products figure prominently in the internal trade. As such, there are well established trade channels for coconut products within the country. The vast improvement in communication and transport systems has enabled quicker movement of goods from one corner to another as well as in transmission of market intelligence to different market centres. The coconut oil trade is in the hands of well established private business houses who deal other vegetable oils also. Because of the requirement of a very huge capital investment for the trade, coupled with the highly fluctuating nature of the prices of coconut products, it is a difficult path for new entrants to tread. Among the coconut growing States in India, the four States in the southern region viz., Kerala, Tamil Nadu, Karnataka and Andhra Pradesh together account for more than 90 percent of the production of coconut in the country. The distribution of area under and production of coconut in the different States and Union Territories is furnished in Appendix 1. Trend in Supply of Coconuts Import of coconut and coconut products is almost negligible during the last five years. As such, trend in 106 production of coconuts will clearly reveal the actual trend in supply. Coconut production during the last five years (Appendix 2) shows an increasing trend. Production of coconuts during the period 1985-1990 has registered a 6 percent growth rate. During 1990-1991, coconut production has touched the level of 9.7 billion nuts, registering an increase of 3.6 percent over the previous year. It is almost likely that production level would attain 10 billion nuts mark by 1991-1992. Among the coconut growing States, the contribution of Kerala, Karnataka and Tamil Nadu in production of coconuts has direct bearing on all India production. Especially, production of coconuts in Kerala influences the price of coconut products at the national level. This is one of the major factors in tilting the price level, and this, coupled with import of palm oil for distribution in Kerala, affects the price of coconut oil considerably. Spectacular improvement in production of coconut in Kerala and regular distribution of palm oil through the public distribution system at rates much lower than that of coconut oil always contributed to the downswing in price level. Marketing of Coconut Products The intervention of the Government agencies in coconut products trade has been minimum and as such coconut and coconut products in India enjoy a free market and the price is dependent on the overall demand and supply position. Government intervention takes place only to protect the interests of farmers so as to ensure a remunerative price, whenever the price level plummets below the support price. Tender Coconut Tender coconut water is a refreshing drink and is consumed as a soft drink in the metropolitan cities and smaller towns. Around ten percent of the production of coconuts in India is harvested at tender stage and is 107 marketed in big cities, towns and nearby market centres. Tender nuts are harvested throughout the year, almost every week from the same garden. Of late, the tender coconut is gaining popularity because of the preference of consumers to natural drinks vis-a-vis synthetic ones. This is all the more evident in Kerala State where harvesting tender nuts was not at all practised until recently. A situation has emerged where the retail sale of tender nuts is a common sight in cities and towns in Kerala. This is a clear enough signal pointing the scope of expanding tender coconut market on a large scale in Kerala State. Price-wise, the difference between synthetic drinks and tender coconut water is negligible. The slight edge of synthetic drinks over tender coconut water is that synthetic drinks are available in attractive consumer bottles and pouches and can be stored under refrigerated conditions and preserved for longer periods. Tender coconut is a popular soft drink in West Bengal, Orissa, Maharashtra, Andhra Pradesh and Karnataka States and also in the North Eastern States. The demand for tender coconut is comparatively negligible in Kerala because of the fact that mature nuts and its by-products are completely utilized for edible purposes, oil extraction and husk for coir fibre extraction. In the states of W. Bengal, Maharashtra and Orissa, bulk of the nut production is harvested at tender stage and marketed as soft drink. The demand for tender nut is very high during summer period extending from March to May in the country. A process to bottle coconut water from mature nuts and to standardise it to the level of soft drink has been developed by the Regional Research Laboratory, Trivandrum, India. Test marketing of this product in some of the cities revealed encouraging results. Mature Nuts Harvesting pattern of coconut influences the arrival of coconut in the assembling and retail markets 108 as well as at the processing centres. In practice, the number of harvests in India ranges from 6 to 8 times in a year depending on the location, at an interval of 45 to 60 days in between harvests, frequency of harvests being more in summer months. The marketing channel in coconuts consists of intermediaries such as village merchants, commission agents/wholesalers, and retailers within each State and outside the States. In the case of interstate trade, it passes from wholesale dealers/'commission agents of producing States, wherefrom, the stock of nuts enters into internal markets.