Coconut Sector’s Budget Wish list Coconut based products have recorded a slump in growth to the extent of 20% over the exports of the same period of 2008-9, when the severity of the global economic recession was high. Except for Coconut shell steam based activated Carbon, though a Coconut product, is in the Miscellaneous Chemical Product category in the ITC (HS) Code, demonstrated an upward growth of around 25% with most of the exports emanating from Tamilnadu and shipped through Tuticorin, the traditional Coconut products like Copra, Desiccated Coconut, Coconut handicrafts, Virgin Coconut Oil, Tender Coconut Water, showed a dip in the traditional markets. India’s exports to the United States were little higher because Coconut shell based activated Carbon was used vividly in Gold Refining, Pharmaceuticals, automobiles, etc.
Coconut Oil exports from India is highly controlled, though Palm Oil, both Crude as well as Refined Oil which has a duty element of 45% relaxed to 0%, and 52.5% reduced to 7.5%, constituting 80 % of India’s total oil import of 81,83,360 tonnes landed in India during the oil year 2008-9. There has been glowing import of Crude Palm Kernal Oil to the extent of 1.48 lakh tonnes valued Rs 700 Cr which has lorric acid content and used vividly in Ayurvedic Sops. The Coconut Oil which has similar properties becomes the causality being edged out of demand. The import has grown by around 40%, which has resulted in a slump for edible oil manufactured in India, resulting in farmers totally ignoring oil seed cultivation.
Coconut Oil in sachets containing 200 ml has been subject to Central Excise while all other oils in India do not have any Central Excise levy. Finance Minister is already on record that the three tier CE rates would be abolished and 12% minimum would be imposed.
The banks are shy to lend to the Coconut sector as returns are not heavy, growth is uneven, exports have not picked up, domestic demand is low as there is terrible inflow of imported Palm oil, etc. Today, the price of Coconut Oil made in India is higher than the international price when compared to the landed cif price in Amsterdam. This has dented the competitive edge of Kerala’s export of Coconut Oil. The stimulus offered for Coconut export products like VKGUY (5%), FPS (Special (5%), FMS (3%) should continue, as it would mitigate the negative negligible growth and make the industry extinct!
For a traditional industry like Coconut, which has become a home-stud crop from Plantation crop in Kerala, there is need for Government support. If no support is provided, the traditional industries of India are likely to become sunset industries!
A V Ramanathan, MA LL.B., PG (in) Foreign TradeExport
Consultant,
Export Promotion
Coconut Development Board (Minsitry of Agriculture, GoI)
Kera Bhavan, Kochi 682 011
Mob: 09847404372
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