Commission for Agricultural Costs and PricesÑf"k] lgdkfjrk ,oa fdlku dY;k.k foHkkx

Department of Agriculture, Cooperation and Farmers WelfareÑf"k ,oa fdlku dY;k.k ea=ky;

Ministry of Agriculture and Farmers WelfareHkkjr ljdkj

Government of IndiaubZ fnYyhNew Delhi

flrEcj] 2017September, 2017

2018 SEASON

Price Policy for

Copra

2018 SEASONiii

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CopraVijay Paul Sharma Commission for Agricultural Costs and PricesChairman Department of Agriculture, Cooperation

and Farmers Welfare Ministry of Agriculture and Farmers Welfare Krishi Bhawan, New Delhi 110 001

Tel: 011-23385216Fax: 011-23383848

Preface and Acknowledgements

I have the honour to submit the report of “Price Policy for Copra: 2018 Season”. The report contains Minimum Support Price (MSP) and non-price recommendations for milling and ball copra. While making price policy recommendations, the Commission has taken into account various factors such as cost of production, overall demand-supply situation, domestic and international prices of edible oils, inter-crop price parity, terms of trade, and likely impact of MSP on general price level. I hope these recommendations will serve the interests of all stakeholders and incentivise coconut farmers to adopt new technologies to improve productivity and efficiency.

I would like to express my sincere gratitude and thanks to coconut farmers/farmers representatives, officials from Coconut Development Board and State Governments, representatives from coconut industry, and other stakeholders for providing valuable insights and information during the meetings and preparation of this report. I extend my special thanks to the Government of Kerala for arranging consultations with coconut farmers, Government officials, coconut processors and other stakeholders. Sincere thanks to the Directorate of Economics and Statistics, Ministry of Agriculture & Farmers Welfare for providing key data on cost estimates for coconut production.

I admire the enormous efforts of member, officers and staff of the Commission in preparation of this report. Sincere thanks to Dr. Shailja Sharma, Member Secretary, for her valuable contribution and untiring efforts. I wish to thank and acknowledge the contributions of advisors Ms. Nutan Raj, Mr. K. M. M. Alimalmigothi and Mr. D. K. Pandey. The report would not have been possible without active support and contribution of Mr. Raj Kumar, Dr. S. K. Gupta, Dr. Harish Kumar Kallega, Mr. Amit Sahu, Mr. Sube Singh, Mr. Byasadev Naik and Ms. Reeta Yadav, for which I want to give them special thanks.

September 2017 (Vijay Paul Sharma)

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Cont

ents

ContentsSl. No. Description Page No.

Acronyms x-xiSummary of Recommendations xii Price Policy Recommendations xii Non-price Policy Recommendations xii Productivity Improvement xii Farm Mechanisation xii Procurement of Matured De-husked Coconuts xiiiEffective Procurement xiiiComprehensive Scheme (CS) Coverage xiiiValue-Addition and By-Product Utilization xiii Trade Policy xiv

1

Overview 1 Productivity Trends 2 Utilization Pattern of Coconut 3 Value-Addition and Product Diversification 3 Challenges Faced by Coconut Sector 4 Productivity Enhancement 5 Promotion of Intercropping for Higher Income 5 Farm Mechanisation 5 Effective Procurement System 6 Structure of the Report 7

2

Demand-Supply of Copra and Efficacy of MSP 8 Demand-Supply Situation 8 Price Trends 10 Efficacy of Copra Price Policy 11 Procurement Operations 12 Raw/De-husked Coconut Procurement 13 Procurement Period 14 Recapitulation 15

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3

Productivity and Efficiency 16 Growth Rates of Area, Production and Productivity 16 Productivity Trends in Major Producing States 18 District Level Productivity of Coconut 19 Recapitulation 20

4

Trade Competitiveness of Copra and Coconut Oil 21 Global Scenario 21 India’s Trade in Coconut and Coconut based Products 23 Domestic and World Prices 25 Global Outlook 27 Trade Policy 28Recapitulation 29

5

Costs, Returns and Profitability 30 Costs, Returns and Profitability of Coconut: TE2015-16 31 Labour and Input Price Movement 32Cost Projection of Copra for 2018 Season 34Returns of Coconut versus Paddy 35Recapitulation 36

6

Considerations and Recommendations for Price Policy 38Price Trends 38Productivity Trends 38Procurement of De-husked Fresh Coconut 39Extend Procurement Period 39 Value-Addition and Product Diversification 39 Challenges Faced by Coconut Sector 40 Productivity Improvement 40 Promotion of Inter-cropping for Higher Income 40 Farm Mechanisation 40 Climate Change 40Costs and Profitability of Coconut 41 Cost of Production and MSP of Copra 41

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List of TablesList of Tables

Table No. Title Page No.

Table 2.1 Domestic Trends in Stock-to-Use Ratio of Coconut Oil 9

Table 2.2 International Trends in Stock-to-Use Ratio of Coconut Oil (January to December) 9

Table 2.3 Wholesale Prices vis-à-vis MSP of Copra, 2008 to 2017 12 Table 2.4 Procurement of Copra at Minimum Support Price 13 Table 2.5 Monthly Distribution (%) of Market Arrivals of Copra, TE2016 15 Table 3.1 Average Compound Growth Rate of Coconut 1990s to 2010s 17 Table 3.2 Annual Growth Rate of Coconut Area, Production and Productivity 18 Table 3.3 District-level Productivity Trends in Major Coconut Producing States 20 Table 4.1 Commodity Price Forecasts in Nominal US Dollars 27 Table 4.2 Bound Tariff and Applied Tariff on Edible Oils in India 28Table 5.1 Gross and Net Returns of Coconut, TE2015-16 31

Table 5.2 Average Annual Growth in Wages of Agricultural Labour by States and all-India Level 33

Table 5.3 Comparative Returns of Coconut versus Paddy 36 List

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List of ChartsChart No. Title Page No. Chart 1.1 Share of Major States in Area and Production of Coconut, TE2016-17 2Chart 1.2 Major Copra Producing States, TE2016-17 2 Chart 1.3 State-wise Productivity Trends in Coconut during 2012-13 to 2016-17 3

Chart 2.1 MSP of Copra vis-a-vis Wholesale Prices of Copra and Coconut Oil, January 2015 to August 2017 10

Chart 2.2 Trends in Wholesale Prices of Coconut Oil and Palm Oil, 2015 to 2017 11

Chart 3.1 All India Area, Production and Productivity of Coconut 2007-08 to 2016-17 17

Chart 3.2 State-wise Productivity of Coconut, TE2010-11 and TE2016-17 19 Chart 4.1 Major Producers of Coconut and Copra, TE2015 21 Chart 4.2 Major Producers Coconut Oil, TE2016-17 22 Chart 4.3 Major Exporters and Importers of Coconut Oil, TE2016-17 23

Chart 4.4 Changing Shares of Different Products of Coconut, in Exports in Value Terms 24

Chart 4.5 India’s Exports & Imports of Coconut Oil (in volume terms), from 2006-07 to 2016-17 24

Chart 4.6 India’s Exports & Imports of Coconut Oil (in value terms), from 2006-07 to 2016-17 25

Chart 4.7 Domestic and International Prices of Copra vis à vis MSP 26 Chart 4.8 Domestic and International Prices of Coconut oil 26 Chart 4.9 International Prices of Coconut Oil and Palm Kernel Oil 27

Chart 5.1 Share of Major Inputs in Total Cost of Production (C2), TE2015-16 32

Chart 5.2 Average Daily Wage Rate of Agricultural Labour 2016-17 and Growth in Wages in 2016-17 over 2015-16 33

Chart 5.3 Movements in Prices of Farm Inputs (May-July, 2017 over May-July, 2016) 34

Chart 5.4 (a) Supply Curve and Projected Cost (A2+FL) of Milling Copra, 2018 Season 35 Chart 5.4 (b) Supply Curve and Projected Cost (C2) of Milling Copra, 2018 Season 35

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List

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Table No. Topic Page No.

Annex Table 1.1 Minimum Support Prices of Copra 43

Annex Table 2.1 Coconut - State-Wise Area, Production and Yield 44

Annex Table 2.2 Coconut : Month-end Wholesale Prices 46

Annex Table 4.1 Export of Coconut Oils and Coconut Products from India 48

Annex Table 4.2 Import of Coconut Oils and Coconut Products to India 49

Annex Table 5.1 Month-wise and State-wise Average Daily Wage Rates for Agricultural Labour (Man) 50

Annex Table 5.2 Farm Inputs - Wholesale Price Index (Base 2011-12=100) 52

Annex Table 5.3 Copra : Break-up of Cost of Cultivation 54

List of Annex Tables

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AcronymsAcronyms

A2 Actual Paid out Cost

A2 +FL Actual Paid out Cost plus Imputed Value of Family Labour

APCC Asia and Pacific Coconut Community

C2

Comprehensive Cost including Imputed Rent and Interest on Owned Land and Capital Asset

CACP Commission for Agricultural Costs and Prices

CDB Coconut Development Board

C.I.F. Cost, Insurance and Freight

CIPI Composite Input Price Index

CoC Cost of Cultivation

CoP Cost of Production

CPC Coconut Producer Companies

CPCRI Central Plantation Crop Research Institute

CPF Coconut Producer Federations

CPS Coconut Producers Societies

CS Comprehensive Scheme

DAC & FW Department of Agriculture, Cooperation and Farmers Welfare

DES Directorate of Economics and Statistics

DGCIS Directorate General of Commercial Intelligence and Statistics

DGFT Directorate General of Foreign Trade

DIPP Department of Industrial Policy & Promotion

EDC Export Development Council

EU European Union

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Acro

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FAQ Fair Average Quality

FPOs Farmer Producer Organizations

GVO Gross Value of Output

HSD High Speed Diesel

ICAR Indian Council of Agricultural Research

KERAFED Kerala Kerakarshaka Sahkarna Federation Ltd

MSP Minimum Support Price

MT Metric Tonne

NABARD National Bank for Agriculture and Rural Development

NAFED National Agricultural Cooperative Marketing Federation of India

NCCF National Cooperative Consumer’s Federation of India Limited

NGOs Non-Governmental Organizations

OGL Open General License

PSS Price Support Scheme

Q1 , Q2 , Q3 , Q4 Quarters referring to the Calendar Year

Qtl Quintal

SAU State Agricultural Universities

SHG Self Help Group

SUR Stock to Use Ratio

TE Triennium Ending

USA United States of America

USDA United States Department of Agriculture

WPI Wholesale Price Index

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Summary of RecommendationsPrice Policy Recommendations

S.1 The Commission recommends the MSP for milling copra at `7500 per quintal and for ball copra at `7750 per quintal for 2018 season. The weighted average all-India A2+FL cost of production of copra is projected at ` 5007 per quintal and modified C2 cost at 7822 per quintal for 2018 season. This MSP of milling copra would give gross margin of 49.8 percent. This increase in MSP has been given, as currently domestic prices of copra and coconut oil are high and copra prices closely follow coconut oil prices former being usually two thirds of the latter.

Non Price Policy Recommendations

Productivity Improvement

S.2 India has the highest productivity among major coconut producing countries in the world but yield levels in Kerala, the largest producer of coconut in the country, are below all-India average and much lower than other major producers like Tamil Nadu and Andhra Pradesh. Therefore, there is an urgent need for improving crop productivity to reduce cost of production and enhance profitability and competitiveness. Replanting/rejuvenation of senile old plantations with quality planting material along with effective management of diseases and pests and efficient use of inputs including irrigation water would help in improving crop yields. The Commission recommends that major producing states like Kerala, Karnataka and Tamil Nadu should develop a roadmap for overall development of coconut economy.

Farm Mechanisation:

S.3 Coconut farming is labour-intensive but shortage of labour and rising agricultural wages has led to significant increase in cost of cultivation. Moreover, traditional methods of coconut harvesting also pose a serious threat to life of the farmer. However, mechanization in coconut farming has not progressed much as attempts made to

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Procurement of Matured De-husked Coconuts

S.4 Majority of coconut farmers are small and marginal and most of them sell their produce as raw nuts. In order to make MSP and price support scheme effective, vibrant farmers collectives/groups like producer cooperatives, Self Help Group (SHGs), coconut producer societies/companies, etc. should be involved in procurement of de-husked coconut and equipped with scientific dryer/processing facilities for production of copra. Central and State government should provide financial and technical assistance to strengthen such institutions and develop necessary infrastructure. The Commission is of the view that in the event of market prices of de-husked coconut falling below support price, the state government should go for direct benefit transfer to farmers (difference between support price and market price) rather than government-supported procurement of raw coconuts.

Effective Procurement

S.5 The National Agricultural Cooperative Marketing Federation of India Limited (NAFED) and National Cooperative Consumer Federation of India Limited (NCCF) are the central nodal agencies to undertake price support operations at the Minimum Support Prices in the coconut growing states. During the last five years, from 2012-2016, market prices of milling copra were below MSP in 2012 and 2016 but about 66.5 thousand tonnes were procured during 2012 and less than two thousand tonnes in 2016 by NAFED. This level of procurement is too low to make an impact on the market prices. Given that coconut market arrivals are spread almost throughout the year, the Commission recommends that restriction on Price Support Scheme (PSS) operations need to be revisited and suitably modified depending upon the market arrivals in different states.

Comprehensive Scheme (CS) Coverage

S.6 The ‘Comprehensive Scheme (CS) for studying the Cost of Cultivation of Principal Crops in India’ covers three states for coconut viz. Kerala, Tamil Nadu and Karnataka. However, sample size in case of Karnataka is very small. The Commission recommends that the CS should cover Andhra Pradesh and increase sample size for Karnataka to get more reliable and representative all-India cost of production estimates.

Value-Addition and By-Product Utilization

S.7 Consumption of coconut oil has been declining worldwide due to higher prices relative to other competing oils available in the market and perceived health issues. In this changing scenario, it is important to diversify into other-value added products and

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Trade Policy

S.8 Strong taste preferences prevail for some oils but there is a high degree of consumption substitution among the vegetable oils. Patterns of edible oil consumption in India have changed with increased urbanization, rising income, improved standards of living and food safety concerns. Coconut oil is still an important cooking medium in southern parts of the country but its relative importance has been declining due to availability of cheaper substitutes. Production and consumption trends of vegetable oils in India indicate widening gap between domestic production and consumption. The share of imports in total availability of edible oils has increased from about 10 percent in early-1990s to about 70 percent in 2015-16, mainly due to imports of low-priced palm oil and soybean oil. Therefore, import duty on edible oils needs to be linked to world prices with higher import duty on refined oils than crude oils.

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Overview1.1 Coconut is a traditional plantation crop of India and is known for is versatility, as is

evident from its traditional uses ranging from food to cosmetics. It is a part of regular diets of many people in the tropics and sub-tropics. India is the largest producer of coconut in the world with production of 16.8 million tonnes 2016-17 (3rd Advance Estimate), which is more than 30 percent of the world production. India along with the two other major producers, Indonesia and Philippines accounts for 75 percent of the world production. The productivity of coconut is the highest in India at 10119 nuts per hectare followed by Indonesia (4530 nuts) and Philippines (4196 nuts).

1.2 In India, coconut is cultivated in a large number of States and Union Territories but it is mainly concentrated in the coastal areas of Kerala, with an acreage share of 35.7 percent followed by Karnataka (25.3 percent), Tamil Nadu (22.4 percent) and Andhra Pradesh (5.1 percent) (Chart 1.1). These four States together account for over 88.5 percent of total area, with Kerala having the highest share of production at 29.5 percent followed closely by Tamil Nadu (28.6 percent), Karnataka (25.4 percent) and Andhra Pradesh (7.4 percent). Kerala and Tamil Nadu are major producers of milling copra while Karnataka produces about 57.2 percent of ball copra (Chart 1.2)

1.3 Coconut production in India, which witnessed a declining trend during 2012-13 to 2014-15, increased by 8.5 percent in 2015-16 and 10.4 percent in 2016-17. The increase was mainly due to increase in production in Kerala by almost 52 percent in 2015-16 due to a significant increase in both area and yield. The area under coconut increased from 19.76 lakh hectares in 2014-15 to 20.88 lakh hectares in 2015-16 and marginally fell to 20.76 lakh hectares in 2016-17 at all-India level. The increase in area was mainly in Karnataka and Kerala as a result of various coconut development programmes, which target to bring more area under coconut cultivation in the potential belts thereby increasing coconut production in the country. Under the Scheme of Replanting and Rejuvenation of Coconut Gardens, financial assistance is given to farmers for cutting and removal of old, senile, unproductive and disease advanced palms, replanting with quality planting material, rejuvenation of existing gardens through integrated management practices and training of farmers to improve productivity of the crop.

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Chart 1.1: Share of Major States in Area and Production of Coconut, TE2016-17Chart 1.1: Share of Major States in Area and Production of Coconut, TE2016-17

Source: Horticulture Division, Ministry of Agriculture and Farmers Welfare

Chart 1.2: Major Copra Producing States, TE2016-17

Source: Coconut Development Board

Productivity Trends

1.4 Though India has the highest productivity of coconut in the world, Kerala, the major

producing state, has one of the lowest productivity, even less than the all-India average and

almost half of Andhra Pradesh and Tamil Nadu. Due to two consecutive years of drought in

Tamil Nadu, coconut productivity witnessed a declining trend. Andhra Pradesh registered a

significant improvement in yield during 2016-17. Improvement in productivity in Kerala can

Ker35.7%

Kar25.3%

TN22.4%

AP5.1%

Odi2.5%

Others8.9%

(a) Area

Ker29.5%

Kar25.4%

TN28.6%

AP7.4%

Odi1.5%

Others7.6%

(b) Production

Kerala45.9%

Karnataka6.3%

TN45.0%

AP1.6%

A&N, Lakshadweep

1.2%

(a) Milling Copra

Kerala18.0%

Karnataka57.2%

TN15.7%

AP7.9%

A&N, Lakshadweep

1.2%

(b) Edible Copra

Chart 1.1: Share of Major States in Area and Production of Coconut, TE2016-17

Source: Horticulture Division, Ministry of Agriculture and Farmers Welfare

Chart 1.2: Major Copra Producing States, TE2016-17

Source: Coconut Development Board

Productivity Trends

1.4 Though India has the highest productivity of coconut in the world, Kerala, the major

producing state, has one of the lowest productivity, even less than the all-India average and

almost half of Andhra Pradesh and Tamil Nadu. Due to two consecutive years of drought in

Tamil Nadu, coconut productivity witnessed a declining trend. Andhra Pradesh registered a

significant improvement in yield during 2016-17. Improvement in productivity in Kerala can

Ker35.7%

Kar25.3%

TN22.4%

AP5.1%

Odi2.5%

Others8.9%

(a) Area

Ker29.5%

Kar25.4%

TN28.6%

AP7.4%

Odi1.5%

Others7.6%

(b) Production

Kerala45.9%

Karnataka6.3%

TN45.0%

AP1.6%

A&N, Lakshadweep

1.2%

(a) Milling Copra

Kerala18.0%

Karnataka57.2%

TN15.7%

AP7.9%

A&N, Lakshadweep

1.2%

(b) Edible Copra

Source: Horticulture Division, Ministry of Agriculture and Farmers Welfare

Chart 1.2: Major Copra Producing States, TE2016-17

Source: Coconut Development Board

Productivity Trends1.4 Though India has the highest productivity of coconut in the world, Kerala, the major

producing state, has one of the lowest productivity, even less than the all-India average and almost half of Andhra Pradesh and Tamil Nadu. Due to two consecutive years of drought in Tamil Nadu, coconut productivity witnessed a declining trend. Andhra Pradesh registered a significant improvement in yield during 2016-17. Improvement in productivity in Kerala can have considerable impact on all-India yield; therefore, efforts should be made to increase crop productivity in the State.

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Chart 1.3: State-wise Productivity Trends in Coconut during 2012-13 to 2016-17

have considerable impact on all-India yield; therefore, efforts should be made to increase

crop productivity in the State.

Chart 1.3: State-wise Productivity Trends in Coconut during 2012-13 to

2016-17

Utilization Pattern of Coconut

1.5 As per Central Plantation Crop Research Institute (CPCRI), of the total production of

coconuts, about 50 percent is used as mature nuts, 35 percent is used for milling and ball

copra and 15 percent is consumed in the tender form for drinking purposes. Copra is dried

kernel from coconut and milling copra is used to extract oil while edible grade of copra is

consumed as a dry fruit and used for religious purposes. There is a general decline in

household level consumption of coconut oil in major consuming states and these changes in

consumption pattern provide an opportunity to diversify into value-added products. The

Commission recommends Minimum Support Price (MSP) for milling copra and ball copra,

which account for about 35 percent of total coconut production. Therefore, emphasis on

value-addition is needed to make the sector more profitable and competitive.

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2012-13 2013-14 2014-15 2015-16 2016-17

ANDHRA PRADESH KARNATAKA KERALA TAMIL NADU All India

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Utilization Pattern of Coconut

1.5 As per Central Plantation Crop Research Institute (CPCRI), of the total production of coconuts, about 50 percent is used as mature nuts, 35 percent is used for milling and ball copra and 15 percent is consumed in the tender form for drinking purposes. Copra is dried kernel from coconut and milling copra is used to extract oil while edible grade of copra is consumed as a dry fruit and used for religious purposes. There is a general decline in household level consumption of coconut oil in major consuming states and these changes in consumption pattern provide an opportunity to diversify into value-added products. The Commission recommends Minimum Support Price (MSP) for milling copra and ball copra, which account for about 35 percent of total coconut production. Therefore, emphasis on value-addition is needed to make the sector more profitable and competitive.

Value-Addition and Product Diversification

1.6 Nearly 10 million people in the country are dependent on coconut for their livelihood. However, coconut farmers and industry are facing various challenges due to low productivity and highly fluctuating prices of coconut oil and other products. There has been a gradual shift from coconut oil to palm oil for food and industrial consumption due to lower price of palm oil and declining competitiveness of coconut oil vis-à-vis other substitutes. It is, therefore, important to emphasize on value- addition in coconut products and utilization of by-products for better returns to coconut farmers. Various uses to which different parts of coconut can be put are presented in Figure 1.

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Figure 1: AN INFOGRAPHIC ON VARIOUS COCONUT USES

COIR :

• Floor mats and doormats• Brushes• Ropes and Strings• Stuffing for mattress• Caulking for boats and fishing nets

COCONUT WATER:

• Nata de coco (a jelly-like food)• Coconut wine• Coconut vinegar

HUSKS TOGETHER WITH COCONUT SHELLS:

• Coconut sugar or palm sugar for fuel, and are a source of charcoal

• To buff floors• As a mosquito repellent when burned

(the smoke repels the insects)• Discarded husks can be used: • For variety of household products• Flooring materials

PRODUCTS EXTRACTED FROM COCONUT MEAT:

• Coconut oil • Coconut milk• Toddy and nectar• Copra• Coconut Sap – Can further yield to

Neera• Palm wine (when fermented) • Sweet syrup or candy

SHELLS:

• To create bowls, utensils and handi-crafts

• As bodies for some musical• Instruments or caves for aquariums• Exfoliating products (when ground)

COCONUT LEAVES :

• Brooms• Baskets and mats• Cooking skewers• Kindling arrows • Roofing thatch and temporary sheds

COCONUT TRUNK:

• Used to make furniture and houses• Used in Hawaii to create drums, con-

tainers and canoes

COCONUT ROOTS:

• Used as dye • Used as a mouthwash• Frayed piece of coconut root can be

used as toothbrush

Source: http://www.mercola.com/infographics/coconut-uses.htm

Challenges Faced by Coconut Sector

1.7 The coconut sector is confronted with a number of constraints and challenges such as low and fluctuating productivity due to old and senile plantations, shortage of quality planting material, incidence of diseases and insect-pests, poor management of the farms, shortage of skilled manpower, lack of assured irrigation facilities, poor post-harvest management and infrastructure, lack of access to assured market, and competition from substitute oils. The challenges facing coconut sector need to be addressed through focusing on improving productivity in a sustainable manner, value-addition and strong market linkages.

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Productivity Enhancement

1.8 Coconut productivity is constrained by several factors that include environmental (biotic and abiotic), technological, institutional and agronomic such as low soil fertility, low quality of varieties, emerging pests and diseases, lack of irrigation facilities, small farm size, etc. High yielding varieties and hybrids have the potential to improve crop yields by 30-40 percent than traditional varieties. Most of coconut plantations in India are old and senile, therefore, rejuvenation/replanting with quality planting material is required.

1.9 Root (wilt) disease is a major problem in Kerala and parts of Tamil Nadu, hence, efforts should be made to develop disease-free planting material. However, availability of quality planting material is a major constraint and needs to be addressed on priority basis. The Commission recommends that main coconut producing states should frame a state-specific policy for rejuvenation/replanting of coconut plantation with high quality planting material in a time bound manner. Private sector including farmers should be encouraged and incentivized to establish nurseries for production of quality planting material. However, it is important to develop a system of accreditation of nurseries to ensure quality standards and supply of planting material from non-accredited nurseries should be stopped. ICAR, SAUs, CDB and other organizations should support this initiative by providing training to farmers to establish nurseries.

Promotion of Intercropping for Higher Income

1.10 In India, about 98 percent of the coconut holdings are less than 2 hectare in size, out of which more than 90 percent are less than one hectare. Most of these small holdings are mainly under mono cropping system. Coconut provides great scope for mixed/inter-cropping and various technologies have been developed by ICAR/SAUs for coconut based inter/mixed, multi-storeyed multi-species cropping systems. Banana, cocoa, pineapple, black pepper, etc. are some of the most suitable crops to grow as intercrops with coconut trees. However, these technologies need to be promoted among farmers to maximise farm profitability and reduce risks.

Farm Mechanisation

1.11 There is an acute shortage of labour for carrying out various inter-cultural operations in coconut cultivation in general but harvesting in particular. Rising wages have compounded the problem and led to significant increase in cost of cultivation. Traditional methods also pose a serious threat to life of the farmer due to the height of trees. Despite these constraints, mechanization in the coconut farming has not progressed much as attempts made to develop manual as well as self-propelled climbing devices for coconut harvesting by ICAR/SAUs have not been very successful.

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Therefore, there is need to develop a simple user-friendly and affordable harvesting and spraying devices. The Commission recommends that ICAR/SAUs should be assigned the task of designing an appropriate machine for coconut harvesting.

Effective Procurement System

1.12 Majority of the coconut farmers are small and marginal and have no or inadequate facilities for conversion of coconut into copra. Most of them sell their produce as raw nuts and do not benefit from price support operations. The Commission is of the view that large number of FPOs promoted by CDB, NABARD and other agencies, primary cooperatives, SHGs, NGOs, etc, can be used for aggregation and primary level processing of raw coconuts to benefit from MSP operations. Since it is difficult to create processing facilities at individual level, these farmers’ organizations should be encouraged to create such infrastructure facilities for procurement of raw coconuts from member farmers and conversion into FAQ Copra.

1.13 Shortage of working capital was reported as a major constraint by procurement agencies, especially farmers’ collectives like CPS/CPF/CPCs. As these grass root level farmers’ organizations are in the nascent stage of formation and do not possess adequate working capital for undertaking the procurement operations, some support in the form of revolving fund can be provided to the farmers’ collectives. Only few co-operatives in Kerala and Tamil Nadu have infrastructure for conversion of coconut into copra, which are inadequate for meeting the requirement. The agencies engaged in procurement operations have shown very little interest in procurement of raw nuts in view of the risk involved in ascertaining the maturity of coconuts, perishable nature of raw coconuts, lack of processing facilities and scientific and quality storage facilities. In many of the cases, copra produced fails to meet quality prescribed for FAQ grade milling copra. In addition, procurement agencies are operating few collection centres in the main areas. The Commission feels that to make the implementation of MSP effective the following steps need to be taken:

1. Adequate infrastructure for conversion of raw coconut into copra should be provided to all procurement agencies and financial support be provided for the same.

2. Farmers’ collectives such as primary level cooperatives, Coconut Producers Societies/Federation/Companies, SHGs, etc. should be involved in procurement of dehusked mature coconut with water for conversion into copra and supply to the state level agencies. These organizations should be equipped with

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modern copra dryer facilities for production of Fair Average Quality (FAQ) copra with financial assistance from the Central and State agencies.

3. The Price Support Scheme (PSS) operations should not be restricted to six months and such interventions should be undertaken whenever market prices fall below MSP as pattern of market arrivals is well distributed throughout the year.

Structure of the Report

1.14 In the subsequent chapters of this report, various aspects of coconut crop have been analyzed. Demand-supply situation and efficacy of price policy of copra has been discussed in Chapter 2. Trends in productivity of coconut at all-India and state level are presented in Chapter 3. Chapter 4 examines domestic vis-a-vis international price trends and trade policy with a view to fostering global competitiveness. Costs, returns and profitability of copra are analysed in Chapter 5. After careful analysis of all these factors, the Commission has given its price and non-price policy recommendations for copra for 2018 season

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Demand-Supply of Copra and Efficacy of MSP

2.1 Patterns of edible oil consumption in India have changed with increased urbanization, rising income, improved standards of living, and food safety concerns. India is one of the largest producer, consumer and importer of edible oils in the world. Palm, soybean, mustard, sunflower and cotton oils are the most commonly consumed edible oils in India. Till the early-seventies, groundnut accounted for almost 60 percent of India’s edible oil consumption, followed by mustard (28 percent) but now share of groundnut oil is hardly one percent and mustard about 10 percent. Coconut oil is still an important cooking medium in southern parts of the country but its relative importance has been declining due to availability of cheaper substitutes. Production and consumption trends of vegetable oils in India indicate widening gap between domestic production and consumption. In early-1990s country was almost self-sufficient and imports were just 0.5 million tonnes in 1990-91, which increased to 4.3 million tonnes in 2000-01 and reached a record 14.57 million tonnes in 2015-16. The share of imports in total availability of edible oils has increased from less than 10 percent in 1990-91 to about 68 percent in 2015-16.

Demand-Supply Situation

2.2 Market forces such as supply and demand influence prices. Ending stocks reflect the effects of both supply and demand factors and are important indicators of price movements. Therefore, monitoring the level of stocks helps determine market and price risks. Prices tend to have a strong negative correlation with the ending stocks. High stocks typically result in lower prices, while low stocks tend to push prices up.

2.3 Table 2.1 shows the demand-supply situation of coconut oil during 2014-15 to 2016-17. It is evident from the Table that production and consumption of coconut oil has increased during the last three years. The stock-to-use ratio increased (6.29 percent) during 2015-16 but declined (1.63 percent) in 2016-17 mainly due to significant increase in exports, from 6.8 thousand tonnes in 2015-16 to 33.54 thousand tonnes in 2016-17. Imports witnessed a declining trend during last

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three years. The stock-to-use ratio is historically low compared to the past four years’ average stock-to-use ratio of 6.7 percent and may push coconut oil prices up.

Table 2.1: Domestic Trends in Stock-to-Use Ratio of Coconut Oil(Quantity in 000 tonnes)

SI. No. Particulars 2014-15 2015-16 2016-17 (E)1 Opening Stocks 9.78 14.74 37.102 Production 522.50 606.90 608.103 Imports 9.67 5.17 0.014 Total Supply (1+2+3) 541.95 626.81 645.215 Exports 7.21 6.81 33.546 Consumption 520.00 582.90 601.357 Total Use (5+6) 527.21 589.71 634.898 Ending Stock (4-7) 14.74 37.10 10.329 Stock to Use Ratio (%) (8/7*100) 2.80 6.29 1.63

E: EstimatedSource: Coconut Development Board

Table 2.2: International Trends in Stock-to-Use Ratio of Coconut Oil (January to December)

(Quantity in 000 tonnes)

SI. No. Particulars 2015

(Jan-Dec)2016

(Jan-Dec)2017

(Oct 2016-Sep 2017)1 Opening Stocks 360 430 3702 Production 2980 2650 28503 Imports 2100 1660 18204 Total Availability (1+2+3) 5440 4740 50405 Exports 2070 1680 18306 Consumption 2940 2710 28007 Total Use (5+6) 5010 4390 46308 Ending Stocks (4-7) 430 350 410

9 Stock to Use Ratio (%) (8/7*100) 8.58 7.97 8.86

Source: Cocoinfo International 2017 Vol. 24 No. 1

2.4 It is evident from the Table 2.2 that the global production of coconut oil declined during 2016 and is forecast to increase in 2017. The Imports and exports witnessed a decline during the year 2016 but are expected to marginally increase in 2017. The stock-to-use ratio during 2015 was 8.58 percent and declined to 7.97 percent in 2016 but is expected to improve (8.86 percent) in 2017.

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Price Trends

2.5 The prices of coconut and coconut products are mainly influenced by market prices of copra and coconut oil, which are characterized by wide fluctuations, both seasonal and cyclical. There is a close association among prices of coconut oil, milling copra and ball copra as is evident from Chart 2.1. However, the inter-relationship between the price of coconut oil and milling copra is much stronger (correlation coefficient being 0.99), compared with association between coconut oil and ball copra prices (0.49). The correlation coefficient between prices of milling copra and ball copra was 0.54 during January 2015 and August 2017. It is further observed that that on an average market price of milling copra was around 66 percent of the coconut oil price during 2015 to 2017. Wholesale prices of milling copra and ball copra have shown a fluctuating trend during 2015 to 2017.

Chart 2.1: MSP of Copra vis-a-vis Wholesale Prices of Copra and Coconut Oil, January 2015 to August 2017

3

and milling copra is much stronger (correlation coefficient being 0.99), compared with

association between coconut oil and ball copra prices (0.49). The correlation coefficient

between prices of milling copra and ball copra was 0.54 during January 2015 and July 2017.

It is further observed that that on an average market price of milling copra was around 66

percent of the coconut oil price during 2015 to 2017. Wholesale prices of milling copra and

ball copra have shown a fluctuating trend during 2015 to 2017.

Chart 2.1: MSP of Copra vis-a-vis Wholesale Prices of Copra and Coconut Oil, January 2015

to August 2017

Note: Wholesale Prices of milling copra at Kozhikode, ball copra at Arsikere (Karnataka) and coconut oil at

Kochi Market Source: DES, Ministry of Agriculture & Farmers Welfare

2.6 Coconut oil prices in general are influenced by demand-supply, availability of cheaper

substitutes, overall availability of other vegetable oils and import policy of the Government.

Coconut oil generally commands a premium over that of other vegetable oils in the country

but higher price and the fluctuations in prices have led to substitution in many end uses

where coconut oil was once considered indispensable. With the availability of palm oil at

less than 60 percent the prices of coconut oil, many consumers have gradually shifted to

palm oil. Edible oil imports are now allowed under OGL, which has led to significant increase

in imports of low priced edible oils, such as palm oil and soybean oil. As such, the preference

of consumers is shifting to low priced oils.

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Ball Copra Milling Copra Coconut Oil MSP Milling Copra

`/qt

l

2.6 Coconut oil prices in general are influenced by demand-supply, availability of cheaper substitutes, overall availability of other vegetable oils and import policy of the Government. Coconut oil generally commands a premium over that of other vegetable oils in the country but higher price and the fluctuations in prices have led to substitution in many end uses where coconut oil was once considered indispensable. With the availability of palm oil at less than 60 percent the prices of coconut oil, many consumers have gradually shifted to palm oil. Edible oil imports are now allowed under OGL, which has led to significant increase in imports of low priced edible oils, such as palm oil and soybean oil. As such, the preference of consumers is shifting to low priced oils.

Note: Wholesale Prices of milling copra at Kozhikode, ball copra at Arsikere (Karnataka) and coconut oil at Kochi Market Source: DES, Ministry of Agriculture & Farmers Welfare

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2.7 Chart 2.2 depicts the relationship between wholesale prices of coconut oil and palm oil during January 2015 and July 2017. The chart clearly shows that the average wholesale price of coconut oil has been much higher than palm oil price. Coconut and palm kernel oil are used in soap making and demand for these oils is price elastic, so cheap palm oil put downward pressure on domestic prices of coconut oil and thus on copra prices. There has always been a demand to enhance import duty on edible oils to protect coconut and other edible oilseeds farmers. In order to protect interest of oilseeds farmers including coconut growers, the Government increased import duty on crude palm oil from 7.5 percent to 15 percent and refined palm oil from 15 percent to 25 percent and refined soybean oil to 17.5 percent in August 2017.

Chart 2.2: Trends in Wholesale Prices of Coconut Oil and Palm Oil, 2015 to 2017

4

2.7 Chart 2.2 depicts the relationship between wholesale prices of coconut oil and palm oil

during January 2015 and July 2017. The chart clearly shows that the average wholesale price

of coconut oil has been much higher than palm oil price. Coconut and palm kernel oil are

used in soap making and demand for these oils is price elastic, so cheap palm oil put

downward pressure on domestic prices of coconut oil and thus on copra prices. There has

always been a demand to enhance import duty on edible oils to protect coconut and other

edible oilseeds farmers. In order to protect interest of oilseeds farmers including coconut

growers, the Government increased import duty on crude palm oil from 7.5 percent to 15

percent and refined palm oil from 15 percent to 25 percent and refined soybean oil to 17.5

percent in August 2017.

Chart 2.2: Trends in Wholesale Prices of Coconut Oil and Palm Oil, 2015 to 2017

Source: DES, Ministry of Agriculture & Farmers Welfare for coconut oil prices and MFPD&CA for palm oil prices

Efficacy of Copra Price Policy

2.8 Coconut and coconut product prices have been plagued by exposure to volatile world prices.

The milling copra prices ranged from `3325 per quintal in 2009 to `9883 per quintal in 2014

and ball copra prices varied from `4106 in 2008 to `12257 per quintal in 2014. Both milling

and ball copra prices recorded a significant decline during 2015 and 2016. However, prices

have rebounded and milling copra prices were `9225 per quintal and ball copra `8123 per

0

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Efficacy of Copra Price Policy

2.8 Coconut and coconut product prices have been plagued by exposure to volatile world prices. The milling copra prices ranged from `3325 per quintal in 2009 to `9883 per quintal in 2014 and ball copra prices varied from 4106 in 2008 to 12251 per quintal in 2014. Both milling and ball copra prices recorded a significant decline during 2015 and 2016. However, prices have rebounded and milling copra prices were `9225 per quintal and ball copra `8123 per quintal in 2017 (Table 2.3). The increase in coconut oil prices was primarily driven by lower supply of coconut from Tamil Nadu, Andhra Pradesh and Karnataka, which suffered from two consecutive years of drought. It is also evident from the Table that in last 10 years, milling and ball copra prices were lower than MSP in four years, thereby indicating low effectiveness of procurement operations.

Source: DES, Ministry of Agriculture & Farmers Welfare for coconut oil prices and MFPD&CA for palm oil prices

3

and milling copra is much stronger (correlation coefficient being 0.99), compared with

association between coconut oil and ball copra prices (0.49). The correlation coefficient

between prices of milling copra and ball copra was 0.54 during January 2015 and July 2017.

It is further observed that that on an average market price of milling copra was around 66

percent of the coconut oil price during 2015 to 2017. Wholesale prices of milling copra and

ball copra have shown a fluctuating trend during 2015 to 2017.

Chart 2.1: MSP of Copra vis-a-vis Wholesale Prices of Copra and Coconut Oil, January 2015

to August 2017

Note: Wholesale Prices of milling copra at Kozhikode, ball copra at Arsikere (Karnataka) and coconut oil at

Kochi Market Source: DES, Ministry of Agriculture & Farmers Welfare

2.6 Coconut oil prices in general are influenced by demand-supply, availability of cheaper

substitutes, overall availability of other vegetable oils and import policy of the Government.

Coconut oil generally commands a premium over that of other vegetable oils in the country

but higher price and the fluctuations in prices have led to substitution in many end uses

where coconut oil was once considered indispensable. With the availability of palm oil at

less than 60 percent the prices of coconut oil, many consumers have gradually shifted to

palm oil. Edible oil imports are now allowed under OGL, which has led to significant increase

in imports of low priced edible oils, such as palm oil and soybean oil. As such, the preference

of consumers is shifting to low priced oils.

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2.9 Monthly wholesale prices of milling copra in Kozhikode and Payyannur markets of Kerala as well as Ambajipetta market of Andhra Pradesh have been higher than the MSP since January 2017 and the highest price in all these markets was recorded in the month of August 2017 (Annex Table 2.2). Monthly wholesale price of Ball Copra also remained higher than the MSP in Arsikere market of Karnataka since January 2017 and reached the level of `10800 in August, 2017.

Table 2.3: Wholesale Prices vis-à-vis MSP of Copra, 2008 to 2017(`/qtl)

Year

MSP (`/qtl) Average Wholesale Price (`/qtl)

Percentage Change in Wholesale Prices over MSP

Milling Copra Ball copra Milling

CopraBall

CopraMilling Copra Ball Copra

2008 3660 3910 4050 4106 10.7 5.0

2009 4450 4700 3325 4480 -25.3 -4.7

2010 4450 4700 4071 4628 -8.5 -1.5

2011 4525 4775 6113 6412 35.1 34.3

2012 5100 5350 4215 5280 -17.4 -1.3

2013 5250 5500 5521 5323 5.2 -3.2

2014 5250 5500 9883 12251 88.2 122.7

2015 5550 5830 8521 11435 53.5 96.1

2016 5950 6240 5988 7258 0.6 16.3

2017 6500 6785 9225 8123 41.9 19.7

Note: Wholesale Prices of ball copra for Arsikere (Karnataka) and milling copra for Kozhikode (Kerala) Source: DES, Ministry of Agriculture & Farmers Welfare

Procurement Operations

2.10 The National Agricultural Cooperative Marketing Federation of India Limited (NAFED) and National Cooperative Consumer Federation of India Limited (NCCF) are the central nodal agencies to undertake price support operations at the Minimum Support Prices in the coconut growing states. Table 2.4 shows the procurement of milling and ball copra by NAFED since 2012. At all-India level, procurement of milling copra was about 66.5 thousand tonnes during 2012 when market prices were much lower than MSP and fell to 4328 tonnes in 2013 and less than two thousand tonnes in 2016, when market prices were below MSP. This level of procurement is too low to make an impact on the market prices.

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Table 2.4: Procurement of Copra at Minimum Support Price(Tonnes)

State 2012 2013 2016 2017*

Milling Copra

Andhra Pradesh 6628 1 1023 3377

A&N Islands 9033 3202 0 0

Karnataka 2843 79 0 0

Kerala 17950 499 0 0

Tamil Nadu 30000 547 924 1195

Total 66454 4328 1947 4572

Ball Copra

Karnataka 9228 29535 0 1882

Tamil Nadu 0 0 0 0

Kerala 2 0 0 0

Total 9230 29535 0 1883

Note:*as on 17.07.2017.Source: NAFED

Raw/De-husked Coconut Procurement

2.11 Another issue related to procurement operations is that majority of small and marginal farmers sell their produce as raw nuts as they do not have adequate dryer/conversion facilities and also lack scientific and quality storage facilities. Therefore, small and marginal farmers do not benefit from procurement operations. For effective MSP operations, farmer’s collectives/groups like producer cooperatives, Self Help Group (SHGs), Coconut Producers Societies and Coconut Producer Companies (CPCs) should be involved in procurement of de-husked mature coconut for conversion into copra and benefit from MSP. Such organizations should be equipped with scientific dryer facilities for production of Fair Average Quality (FAQ) copra with financial and technical assistance from the Central and State agencies. Coconut Producer Companies can also be designated as state level agencies for procurement operations.

2.12 The Commission has been receiving requests from various state governments and farmers’ organizations for procurement of raw/de-husked coconut. As discussed earlier, small and marginal farmers are mostly excluded from procurement

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operations as they do not have the requisite infrastructure like processing/dryer facilities and financial resources to convert the raw coconut into copra. However, direct government intervention in procurement of raw coconut without vibrant farmers’ organizations and infrastructure facilities is also not feasible and sustainable. For example, in January 2013 Government of Kerala launched a programme, implemented jointly by KERAFED and Department of Agriculture, for procurement of green coconuts directly from farmers through the Krishi Bhavans. Government announced a support price of `14 per kg in 2013 when market prices were hovering around `9-10 per kg and was increased to ` 27 per kg in July 2016. About 1.52 lakh tonnes of raw coconut were procured during January 2013 to January 2017. KERAFED incurred losses to the tune of ` 65 crore as the support price announced by the government was much higher than market prices and also faced several other constraints. The major constraints in procurement of raw coconuts were limited shelf life, difficulty in assessing quality of raw coconuts, inadequate conversion facilities, lack of scientific and quality storage infrastructure, delivery of immature coconuts by some farmers, pilferages during transportation, and delayed payment to farmers. The Commission had recommended in its earlier report that the state government should go for direct benefit transfer to farmers, when market prices fall below support price, rather than government-supported procurement of raw coconuts and also strengthen required infrastructure at producer level for conversion of coconut into copra.

Procurement Period

2.13 Assurance of remunerative and stable prices to coconut farmers is of paramount importance for improving productivity and production. Excessive volatility in prices has a number of negative consequences and farmers need to be protected from such volatility. Timely and adequate procurement of copra under price support scheme when market prices are low would ensure price stability to farmers and benefits of MSP operations will reach the genuine small and marginal coconut farmers. The government has extended PSS operations from 90 days to six months 2016 in a calendar year but in the light of pattern of market arrivals in the country, this restriction needs to be revisited. During Commission’s discussions with the coconut growers and other stakeholders, it was observed that as market arrivals of coconut are well distributed throughout the year (Table 2.5), procurement operations need to be extended to whole year whenever market prices fall below MSP.

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Table 2.5: Monthly Distribution (%) of Market Arrivals of Copra, TE2016

Month Andhra Pradesh* Karnataka Tamil Nadu All-India

January 13.1 8.1 8.0 9.7

February 10.1 8.6 7.6 8.7

March 11.4 4.8 7.4 7.9

April 7.3 5.3 8.2 6.9

May 6.8 6.0 8.9 7.2

June 7.4 6.9 7.9 7.4

July 3.9 8.8 9.4 7.4

August 7.0 10.0 8.5 8.5

September 4.0 10.4 8.8 7.7

October 6.3 15.7 9.1 10.3

November 10.4 6.8 7.9 8.4

December 12.2 8.6 8.5 9.8

Total 100.0 100.0 100.0 100.0

Note: * Data is for 2014. Source: Coconut Development Board and State Governments

Recapitulation

2.14 The low stock-to-use ratio of coconut oil in the country, recent hike in import duty on edible oils and prospects of exports may keep copra and coconut oil prices high. The prices of copra and coconut oil that follow a cyclical pattern and have increased during 2017, are expected to remain high in the coming months. In order to have effective price policy, a robust procurement system needs to be developed by involving producer groups in procurement operations and creating necessary infrastructure. In order to strengthen infrastructure facilities of the agencies involved in procurement activities, the government should extend financial assistance to the agencies. Procurement operations should be extended throughout the year in the light of the pattern of market arrivals in the country.

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Productivity and Efficiency

Chap

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3.1 Coconut is an important commercial crop grown both under plantation and homestead management system. As per 3rd Advance Estimates, India produced about 16.84 million tonnes of coconut in 2016-17 from an area of 2.08 million hectare with a productivity level of 8.11 tonnes per hectare. The crop contributed about `1.33 lakh crore to the value of output from crop sector in 2015-16 and `5283 crore to foreign exchange earnings through exports of coconut and coir products in 2016-17.

3.2 India is the largest producer of coconut in the world and also ranks number one in productivity among major coconut growing countries. However, productivity in the major producing state Kerala is lower than All-India average. Improvement in coconut productivity is vital as this sector provides sustenance to more than 12 million people in the country and over 3 million people are employed in coconut processing and related activities.

Growth Rates of Area, Production and Productivity

3.3 The compound annual growth rates of area, production and productivity of coconut are given in Table 3.1. During the decade of 1990s, coconut acreage increased by about 2 percent while production increased by 1.6 percent due to negative growth rate in productivity. Between 2001-02 and 2010-11 coconut production increased at an annual compound growth rate of 1.5 percent due to improvement in productivity, despite negative rate of growth in area. A similar trend was observed in the current decade where production increased by 1.4 percent despite negative growth rate of area which was compensated by 1.8 percent growth in productivity. Overall in the last three decades there is decline in growth rate of area and production whereas productivity witnessed positive and accelerated growth rate. The coconut sector is confronted with a number of challenges which have resulted in deterioration of production environment. As coconut farming is dominated by small and marginal farmers and confined to agro-ecologically vulnerable regions, there is a need to develop sustainable production practices, ensure access to quality, disease-free planting material, and promote scientific management practices along with effective market access.

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Table 3.1: Average Compound Growth Rate of Coconut 1990s to 2010s (Percent)

Year 1990s 2000s 2010s

Area 2.0 -0.1 -0.4

Production 1.6 1.5 1.4

Yield -0.4 1.6 1.8

Note: 1990s, 2000s and 2010s refer to period 1991-92 to 2000-01, 2001-02 to 2010-11 and 2011-12 to 2016-17 respectively.Source: Horticulture Division, DAC & FW

3.4 Trends in area under coconut, production and productivity during last 10 years are presented in chart 3.1. Area under coconut has remained more or less constant and varied in between 1.90 to 2.14 million hectares in the last 10 years Productivity was 6.97 tonnes/ha in 2013-14 and increased continuously for the next three years and reached 8.11 tonnes/ha in 2016-17. Productivity was highest at 8.3 tonnes/ha in 2009-10 but declined to 5.72 tonnes/ha in 2010-11 thereby reducing the production to 10.84 million tonnes, lowest in the last decade. This sudden decline in production was due to severe drought in 2009-10 and unseasonal late rains affecting the crops in 2010-11. Production was 14.07 million tonnes in 2014-15 and increased for next two years and reached 16.84 million tonnes in 2016-17, highest in the last decade due to rise in productivity. Since the fluctuations in area under coconut have been negligible, production is directly impacted by the coconut productivity.

Chart 3.1: All India Area, Production and Productivity of Coconut 2007-08 to 2016-17

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*

Productivity 7.75 7.75 8.30 5.72 7.21 7.30 6.97 7.12 7.31 8.11

Production 14.75 14.75 15.73 10.84 14.94 15.61 14.91 14.07 15.26 16.84

Area 1.90 1.90 1.90 1.90 2.07 2.14 2.14 1.98 2.09 2.08

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TE 2010-11 6810 9284 3309 5587 4958TE 2016-17* 10906 9571 7556 7513 6161Relative yield 100 87.8 69.3 68.9 56.5

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3.5 Annual growth in area, production and productivity of coconut for the last five years is shown in Table 3.2. It is clearly visible from the table that the productivity and production growth increased in last 5 years from 1.3 percent and 4.5 percent in 2012-13 to 11 percent and 10.4 percent in 2016-17 respectively. Acreage growth during the same period has declined from 3.2 percent to -0.6 percent. Decline in area under cultivation is majorly due to rapid urbanisation that also contributes to decline in output along with the deficit monsoon. Production growth was negative in 2013-14 and 2014-15 due to negative growth in productivity in 2013-14 and negative growth in area in 2014-15. The production growth in 2016-17 is estimated to be about 10.4 percent due to steep increase in productivity growth to 11 percent.

Table 3.2: Annual Growth Rate of Coconut Area, Production and Productivity

(percent)

2012-13 2013-14 2014-15 2015-16 2016-17

Area 3.2 0.1 -7.7 5.7 -0.6

Production 4.5 -4.5 -5.7 8.5 10.4

Productivity 1.3 -4.6 2.2 2.6 11.0

Source: Horticulture Division, DAC & FW

Productivity Trends in Major Producing States

3.6 In order to study productivity trends at state level, triennium ending (TE) average, in major producing states, has been compared during 2010-2011 and 2016-2017 and results are presented in Charts 3.2.

3.7 The major coconut producing states, Kerala, Tamil Nadu, Karnataka and Andhra Pradesh, account for around 90 percent of the total production in the country. Andhra Pradesh and Tamil Nadu have higher productivity than all-India average. Kerala accounts for nearly 37 percent of coconut acreage in India but productivity level is much lower compared with all-India average and other major producers like Andhra Pradesh, Tamil Nadu and Karnataka. Tamil Nadu has comparatively large coconut holdings cultivating hybrid/dwarf varieties, and using scientific and better crop management practices. However, productivity in major coconut growing states of Tamil Nadu, Kerala, Karnataka and Andhra Pradesh took a hit due to deficient monsoon during the last couple of years as coconut cultivation is largely under rainfed conditions. Therefore, efforts are needed to provide at least protective irrigation to the crop.

3.8 In comparison to TE 2010-11, the productivity levels in all the major producing states has shown a positive trend during TE 2016-17, thereby increasing the productivity at national level. The best performing is Karnataka State with an increase of 128.4 percent and lowest performing is Tamil Nadu with only 3.1 percent, whereas

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productivity increase is 60.2 percent in Andhra Pradesh and 24.3 percent in Kerala. At the national level, the yield increased by 34.5 percent during this period. Productivity level in Kerala is at below all-India average and little over half of Andhra Pradesh.

Chart 3.2: State-wise Productivity of Coconut, TE2010-11 and TE2016-17

Note: *3rd Advance Estimates for 2016-17.Source: Horticulture Division, DAC & FW

District Level Productivity of Coconut

3.9 In order to assess the performance of coconut productivity at district level in major coconut producing states at different time periods (TE2006-07 and TE2015-16), number of districts and share of area under different productivity bands are analyzed. The changes in number of districts and area under different yield bands in TE2006-07 and TE2015-16 are presented in Tables 3.3.

3.10 The yield bands considered for analysis are <5000, 5000-10000 and >10000 nuts per hectare. The number of districts and share of area in the highest productivity band of >10000 nuts per hectare has increased in case of Andhra Pradesh, Kerala, and Karnataka. In the middle band of 5000-10000 nuts per hectare, number of districts and share of area has increased in Karnataka and Tamil Nadu whereas it has declined to zero in Andhra Pradesh and declined marginally in Kerala, thereby indicating an improvement in yield. In the lowest yield band, number of districts and share of area has marginally increased in case of Kerala and Tamil Nadu and the area declined to zero in Andhra Pradesh and Karnataka.

3.11 Overall, among the major coconut producing states, performance of Andhra Pradesh and Karnataka has been impressive as the number of districts and share of area has increased in higher yield-bands. Kerala, the highest producer of coconut, is performing below its potential and its share of area in lowest band has increased

AP TN Kar India Ker

TE2010-11 6810 9284 3309 5587 4958TE2016-17* 10906 9571 7556 7513 6161Relative yield 100 87.8 69.3 68.9 56.5

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Coprafrom 4.2 percent to 7.2 percent between TE 2006-07 and TE 2015-16 while there are no districts in Karnataka & Andhra Pradesh in the lowest band.

Table 3.3: District-level Productivity Trends in Major Coconut Producing States

States/ Year<5000 nuts/ha 5000-10000 nuts/ha >10000 nuts/ha

No. of districts Area (%) No. of districts Area (%) No. of districts Area (%)

Andhra PradeshTE 2006-07 1 1.2 4 38.5 3.0 55.8TE 2015-16 0.0 0.0 0.0 1.2 7.0 97.4KeralaTE 2006-07 1.0 4.2 12.0 94.5 0.0 0.0TE 2015-16 2.0 7.2 11.0 85.3 1.0 7.0KarnatakaTE 2006-07 13.0 96.9 0.0 0.0 0.0 0.0TE 2015-16 0.0 0.0 9.0 80.5 3.0 15.6Tamil NaduTE 2006-07 0.0 0.0 3.0 16.4 17.0 79.9TE 2015-16 1 1.1 5.0 29.2 15.0 64.2

Source: Coconut Development Board

Recapitulation

3.12 India is world’s number one producer of coconut yet it has untapped potential for improving productivity. As per Coconut Statistical Yearbook 2015, the level of productivity in India is 10.35 thousand nuts per hectare in 2015, whereas yield in Brazil is higher at 11.57 thousand nuts per hectare, which in turn indicates scope for further utilisation of untapped production potential in India. Faced with a felt need to increase the income of the coconut farmers, India needs to delineate ways and means to realize the untapped production potential. This chapter brought out vividly that focus must be on increasing yield through adopting disease resistant, high yielding, preferably hybrid/dwarf varieties of coconut plants, usage of scientific and better crop management practices, replanting of senile palms with quality planting material, effective management of diseases and pests and efficient management of inputs including irrigation. Further, this chapter underscored the need to pay special attention by major coconut producing States like Kerala and Tamil Nadu to improve their productivity through increasing number of districts and coconut acreage in the high yield bands. Other available means to improve farmers’ income are diversification into value-added products as well as product innovation and organic certification of coconut products to improve their marketability.

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Trade Competitiveness of Copra and Coconut OilGlobal Scenario

4.1 Coconut is mainly grown in coastal areas and Islands in about 90 countries in the tropical wet regions of the world. As per Asia and Pacific Coconut Community (APCC), the global production of coconut was 68.5 billion nuts in TE2015, which is 2.3 percent less from TE2014, due to deficit rainfall in major producing countries. India is the largest producer, with a share of 31.5 percent followed by Indonesia (22.2 percent) and Philippines (21.8 percent) in TE2015 (Chart 4.1). These three countries produce more than three-fourth of global output of coconut. Other major producers are Brazil (4.2 percent) and Sri Lanka (4.1 percent).

Chart 4.1: Major Producers of Coconut and Copra, TE 2015

Source: Asian and Pacific Coconut Community

Source: Asian and Pacific Coconut Community

India31.5%

Indonesia22.2%

Philippines21.8%

Brazil4.2%

Sri Lanka4.1%

Others16.1%

(a) Coconut

Philippines38.9%

Indonesia25.9%

India21.4%

Others13.8%

(b) Copra

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4.2 Copra, the dried kernel, is the main product derived from coconut. As per APCC, global production of copra was 54.6 lakh tonnes in TE2015, about 6.7 percent lower than TE2014. Philippines is the largest producer of copra with a share of 38.9 percent, followed by Indonesia (25.9 percent) and India (21.4 percent) [Chart 4.1]. Top three countries produced more than three-fourth of global copra production in TE2015. Most of copra is processed to produce coconut oil in the producing countries and only 2 percent is traded in the international market.

4.3 As per USDA, global production of coconut oil was 33.6 lakh tonnes in TE2016-17, out of which 51.5 percent was traded. Philippines is the largest producer of coconut oil with a share of 43.2 percent, followed by Indonesia (29.5 percent) and India (13.3 percent) [Chart 4.2]. These three countries produced more than three-fourth of global coconut oil in TE2016-17 which corresponds with their share in copra production as copra is mainly used for extracting coconut oil.

Chart 4.2: Major Producers Coconut Oil, TE2016-17

produce coconut oil in the producing countries and only 2 percent is traded in the

international market.

4.3 As per USDA, global production of coconut oil was 33.6 lakh tonnes in TE 2016-17, out of

which 51.5 percent was traded. Philippines is the largest producer of coconut oil with a

share of 43.2 percent, followed by Indonesia (29.5 percent) and India 13.3 (percent) [Chart

4.2]. These three countries produced more than three-fourth of global coconut oil in TE

2016-17 which corresponds with their share in copra production as copra is mainly used for

extracting coconut oil.

Chart 4.2: Major Producers Coconut Oil, TE 2016-17

Source: United States Department of Agriculture

4.4 The global exports of coconut oil, as per USDA, were 17.9 lakh tonnes in TE 2016-17.

Philippines is the largest exporter of coconut oil with a share of 45.3 percent, followed by

Indonesia (38.5 percent) and Malaysia (7.8 percent) [Chart 4.3]. EU is the largest importer of

coconut oil with a share of 32.8 percent closely followed by USA (32.3 percent) and Malaysia

(10.4 percent) [Chart 4.3]. EU and USA accounted for about two-third of global imports of

coconut oil.

4.5 As per USDA, total global production of major vegetable oils has increased from 122.7

million tonnes in TE 2007-08 to 179.8 million tonnes in TE2016-17, an annual growth rate of

4.3 percent while production of coconut oil marginally declined from 3.41 million tonnes to

3.36 million tonnes during the corresponding period. Palm oil production has increased from

38 million tonnes to 60.9 million tonnes during the same period, at an annual growth rate of

5.3 percent. The share of coconut oil has declined from 2.8 percent in TE2007-08 to 1.9

percent in TE2016-17, while share of palm oil has increased from 31 percent to 33.9

Philippines43.2%

Indonesia29.5%

India13.3%

Vietnam4.9%

Mexico3.9%

Others5.2%

4.4 The global exports of coconut oil, as per USDA, were 17.9 lakh tonnes in TE2016-17. Philippines is the largest exporter of coconut oil with a share of 45.3 percent, followed by Indonesia (38.5 percent) and Malaysia (7.8 percent) [Chart 4.3]. EU is the largest importer of coconut oil with a share of 32.8 percent closely followed by USA (32.3 percent) and Malaysia (10.4 percent) [Chart 4.3]. EU and USA accounted for about two-third of global imports of coconut oil.

4.5 As per USDA, total global production of major vegetable oils has increased from 122.7 million tonnes in TE2007-08 to 179.8 million tonnes in TE2016-17, an annual growth rate of 4.3 percent while production of coconut oil marginally declined from 3.41 million tonnes to 3.36 million tonnes during the corresponding period. Palm oil production has increased from 38 million tonnes to 60.9 million tonnes during the same period, at an annual growth rate of 5.3 percent. The share of coconut oil has declined from 2.8 percent in TE2007-08 to 1.9 percent in TE2016-17, while share of

Source: United States Department of Agriculture

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palm oil has increased from 31 percent to 33.9 percent. As palm kernel oil is a close substitute for coconut oil and is cheaper, it has substituted for coconut oil and led to a decline in share of coconut oil in total vegetable oils.

Chart 4.3: Major Exporters and Importers of Coconut Oil, TE2016-17

percent. As palm kernel oil is a close substitute for coconut oil and is cheaper, it has

substituted for coconut oil and led to a decline in share of coconut oil in total vegetable oils.

Chart 4.3: Major Exporters and Importers of Coconut Oil, TE2016-17

Source: United States Department of Agriculture

India’s Trade in Coconut and Coconut based Products

4.6 Exports of coconut products (excluding coir and coir products) have significantly increased

from `1385.8 crore in 2015-16 to `2064.1 crore in 2016-17 whereas imports have declined

from `532.6 crore to `495.4 crore (7 percent) during the corresponding period. The major

coconut products exported from India are coconut shell based activated carbon with a share

of 39.5 percent, followed by coconut oil refined (10.8 percent), coconuts dried (10.6

percent), coconut oil (7.7 percent), desiccated coconut (7.2 percent) and coconut fresh (7.1

percent), [Annexure Table 4.1]. Coconut Development Board (CDB) has been notified by the

Ministry of Commerce & Industry in April 2009 as an Export Development Council (EDC) for

all coconut products other than those made from husk and fiber. Hence, export of coconut

products such as ball copra, cut copra, coconut oils, coconut shell products, coconut wood

furniture fall under the jurisdiction of the CDB. As regards coir and coir products, exports

have increased by about 20 percent, from `1901.4 crore in 2015-16 to `2281.7 crore in

2016-17.

4.7 Despite being one of the major producers of copra as well as coconut oil in the world, India

exports small quantity due to high domestic demand. However, the country’s exports of

coconut have increased from 4.8 thousand tonnes valued at `20.9 crore in TE2007-08 to

Philippines

45.3%

Indonesia38.5%

Malaysia7.8%

Others8.4%

(a) Exporters

EU-2732.8%

USA32.3%

Malaysia10.4%

China8.0%

Others16.5%

(b) Importers

India’s Trade in Coconut and Coconut based Products

4.6 Exports of coconut products (excluding coir and coir products) have significantly increased from `1385.8 crore in 2015-16 to `2064.1 crore in 2016-17 whereas imports have declined from `532.6 crore to `495.4 crore (7 percent) during the corresponding period. The major coconut products exported from India are coconut shell based activated carbon with a share of 39.5 percent, followed by coconut oil refined (10.8 percent), coconuts dried (10.6 percent), coconut oil (7.7 percent), desiccated coconut (7.2 percent) and coconut fresh (7.1 percent) [Annex Table 4.1]. Coconut Development Board (CDB) has been notified by the Ministry of Commerce & Industry in April 2009 as an Export Development Council (EDC) for all coconut products other than those made from husk and fiber. Hence, export of coconut products such as ball copra, cut copra, coconut oils, coconut shell products, coconut wood furniture fall under the jurisdiction of the CDB. As regards coir and coir products, exports have increased by about 20 percent, from `1901.4 crore in 2015-16 to `2281.7 crore in 2016-17.

4.7 Despite being one of the major producers of copra as well as coconut oil in the world, India exports small quantity due to high domestic demand. However, the country’s exports of coconut have increased from 4.8 thousand tonnes valued at `20.9 crore in TE2007-08 to 88.5 thousand tonnes valued at `477.8 crore in TE2016-17. In value terms, India’s exports of coconut, copra and coconut oil were `20.9 crore, `4.7 crore and `28.0 crore in TE2007-08, which have increased to `477.8 crore, `86.6 crore and `222.5 crore, respectively, in TE2016-17. The changing shares of coconut products being exported from India in value terms, has been shown in [Chart 4.4]. Share of coconut, coconut dried, desiccated coconut, and copra has registered a significant

Source: United States Department of Agriculture

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increase from TE2007-08 to in TE2016-17, whereas the share of activated carbon and coconut oil has declined significantly in the corresponding period. India should lay more emphasis on exports of value-added products rather than on primary commodities so as to increase value realization and create more job opportunities.

Chart 4.4: Changing Shares of Different Products of Coconut, in Exports in Value Terms

88.5 thousand tonnes valued at `477.8 crore in TE2016-17. In value terms, India’s exports

of coconut, copra and coconut oil were `20.9 crore, `4.7 crore and `28.0 crore in TE2007-

08, which have increased to `477.8 crore, `86.6 crore and `222.5 crore, respectively, in

TE2016-17. The changing shares of coconut products being exported from India in value

terms, has been shown in [Chart 4.4]. Share of coconut, coconut dried, desiccated coconut,

and copra has registered a significant increase from TE2007-08 to in TE2016-17, whereas

the share of activated carbon and coconut oil has declined significantly in the corresponding

period. India should lay more emphasis on exports of value-added products rather than on

primary commodities so as to increase value realization and create more job opportunities.

Chart 4.4: Changing Shares of Different Products of Coconut, in Exports in Value Terms

Source: Directorate General of Commercial Intelligence and Statistics

4.8 India does not import coconut and copra, though it imports small quantities of coconut oil.

Exports and imports of coconut oil in volume and value terms during 2006-07 to 2016-17 are

shown in Chart 4.5 and 4.6. India was a net importer of coconut oil till 2009-10 but became

a net exporter during 2010-11 to 2016-17 except in 2014-15. India’s exports of coconut oil

increased by about five times in 2016-17 over 2015-16 while imports were negligible (only 9

tonnes with value of `37 lakh) in 2016-17.

Coconut1.9%

Coconut Dried2.1%

Coconut Desiccate

d1.3%

Copra4.0%

Coconut oil

24.1%

Activated Carbon63.1%

Other Coconut

3.5%

(a) TE2007-08

Coconut7.6%

Coconut Dried13.9%

Coconut Desiccate

d.4.5%

Copra5.7%

Coconut oil

14.6%

Activated Carbon48.5%

Other Coconut

5.3%

(b)TE2016-17

4.8 India does not import coconut and copra, though it imports small quantities of coconut oil. Exports and imports of coconut oil in volume and value terms during 2006-07 to 2016-17 are shown in Chart 4.5 and 4.6. India was a net importer of coconut oil till 2009-10 but became a net exporter during 2010-11 to 2016-17 except in 2014-15. India’s exports of coconut oil increased by about five times in 2016-17 over 2015-16 while imports were negligible (only 9 tonnes with value of `37 lakh) in 2016-17.

Chart 4.5: India’s Exports & Imports of Coconut Oil (in volume terms), from 2006-07 to 2016-17

Source: Directorate General of Commercial Intelligence and Statistics

Chart 4.5: India’s Exports & Imports of Coconut Oil (in volume terms), from 2006-07 to

2016-17

Source: Directorate General of Commercial Intelligence and Statistics

Chart 4.6: India’s Exports & Imports of Coconut Oil (in value terms), from 2006-07 to

2016-17

Source: Directorate General of Commercial Intelligence and Statistics

Domestic and World Prices

4.9 The domestic and international prices of copra vis-à-vis its MSP from 2013 (Q1) to 2017 (Q3)

are given in Chart 4.7 and domestic and international prices of coconut oil are presented in

Chart 4.8. It is observed that domestic wholesale prices of copra as well as coconut oil have

been generally higher than international prices. However, domestic prices were lower than

international prices during 2016 (Q1) to 2016 (Q4) but thereafter increased significantly.

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Export Quantity 3.7 6.8 9.9 5.1 4.3 6.5 6.8 6.7 7.2 6.8 33.5

Import Quantity 14.1 8.1 15.2 13.8 1.1 3.0 1.0 1.6 9.7 5.2 0.0

0

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15

20

25

30

35

40

000

Tonn

es

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Export Value 23.0 33.1 58.4 40.0 40.1 86.9 83.8 85.8 146.6 140.0 381.0

Import Value 51.9 35.3 81.4 53.0 5.6 27.2 6.4 8.7 80.2 41.5 0.4

0

50

100

150

200

250

300

350

400

450

`Cr

ore

Source: Directorate General of Commercial Intelligence and Statistics

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Chart 4.5: India’s Exports & Imports of Coconut Oil (in volume terms), from 2006-07 to

2016-17

Source: Directorate General of Commercial Intelligence and Statistics

Chart 4.6: India’s Exports & Imports of Coconut Oil (in value terms), from 2006-07 to

2016-17

Source: Directorate General of Commercial Intelligence and Statistics

Domestic and World Prices

4.9 The domestic and international prices of copra vis-à-vis its MSP from 2013 (Q1) to 2017 (Q3)

are given in Chart 4.7 and domestic and international prices of coconut oil are presented in

Chart 4.8. It is observed that domestic wholesale prices of copra as well as coconut oil have

been generally higher than international prices. However, domestic prices were lower than

international prices during 2016 (Q1) to 2016 (Q4) but thereafter increased significantly.

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Export Quantity 3.7 6.8 9.9 5.1 4.3 6.5 6.8 6.7 7.2 6.8 33.5

Import Quantity 14.1 8.1 15.2 13.8 1.1 3.0 1.0 1.6 9.7 5.2 0.0

0

5

10

15

20

25

30

35

40

000

Tonn

es

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Export Value 23.0 33.1 58.4 40.0 40.1 86.9 83.8 85.8 146.6 140.0 381.0

Import Value 51.9 35.3 81.4 53.0 5.6 27.2 6.4 8.7 80.2 41.5 0.4

0

50

100

150

200

250

300

350

400

450

`Cr

ore

Chart 4.6: India’s Exports & Imports of Coconut Oil (in value terms), from 2006-07 to 2016-17

Domestic and World Prices

4.9 The domestic and international prices of copra vis-à-vis its MSP from 2013 (Q1) to 2017 (Q3) are given in Chart 4.7 and domestic and international prices of coconut oil are presented in Chart 4.8. It is observed that domestic wholesale prices of copra as well as coconut oil have been generally higher than international prices. However, domestic prices were lower than international prices during 2016 (Q1) to 2016 (Q4) but thereafter increased significantly. Presently, domestic wholesale prices of copra are significantly higher than MSP. There has been a significant rise in domestic prices of coconut oils during the last few months while world prices have shown a declining trend.

4.10 Chart 4.9 displays trends in International prices of coconut oil and palm kernel oil. It may be seen from the chart that coconut oil prices tend to track palm oil fairly closely but coconut oil prices have been higher than palm oil prices. During April-July 2017, coconut oil prices were 57.6 percent higher than palm kernel oil. In August 2017, coconut oil price was US $ 1604 per metric ton compared with US $ 1165 per metric ton of palm kernel oil. During January 2016 and August 2017, coconut oil prices were about 24.5 percent higher than palm kernel oil. However, the difference between coconut oil and palm kernel oil price has increased substantially during the last six months.

Source: Directorate General of Commercial Intelligence and Statistics

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Chart 4.7: Domestic and International Prices of Copra vis à vis MSP

Presently, domestic wholesale prices of copra are significantly higher than MSP. There has

been a significant rise in domestic prices of coconut oils during the last few months while

world prices have shown a declining trend.

4.10 Chart 4.9 displays trends in International prices of coconut oil and palm kernel oil. It may be

seen from the chart that coconut oil prices tend to track palm oil fairly closely but coconut

oil prices have been higher than palm oil prices. During April-July 2017, coconut oil prices

were 57.6 percent higher than palm kernel oil. In August 2017, coconut oil price was US $

1604 per metric ton compared with US $ 1165 per metric ton of palm kernel oil. During

January 2016 and August 2017, coconut oil prices were about 24.5 percent higher than palm

kernel oil. However, the difference between coconut oil and palm kernel oil price has

increased substantially during the last six months.

Chart 4.7: Domestic and International Prices of Copra vis à vis MSP

Source: World Bank and DES, DAC FW. Note: Copra (Philippines/Indonesia), bulk, c.i.f., NW Europe and domestic wholesale prices at Kozhikode. * Domestic and International prices are average price of July & August month for the quarter.

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3*

MSP of Copra (Milling) 5200 5200 5200 5200 5250 5250 5250 5250 5550 5550 5550 5550 5950 5950 5950 5950 6500 6500 6500

Domestic Price 4558 4508 5533 7483 8750 1060010783 9400 9842 9075 8267 6900 5733 5333 5900 6983 8667 9133 9900

International Price 2997 3132 3755 4910 5538 5519 4879 4908 4727 4677 4596 4859 5771 6814 6810 6997 7573 7039 6810

0

2000

4000

6000

8000

10000

12000

`/ q

tl.

Note: Copra (Philippines/Indonesia), bulk, c.i.f., NW Europe and domestic wholesale prices at Kozhikode.*Domestic and International prices are average price of July & August month for the 2017 Q3.Source: World Bank and DES, Ministry of Agriculture and Farmers Welfare

Chart 4.8: Domestic and International Prices of Coconut oilChart 4.8: Domestic and International Prices of Coconut oil

Source: World Bank and DES, DAC FW. Note: Coconut Oil (Philippi and DES, DAC FW.nes/Indonesia), bulk, c.i.f., Rotterdam and domestic wholesale prices at Kochi. * Domestic and International prices are average price of July & August month for the quarter.

Chart 4.9: International Prices of Coconut Oil and Palm Kernel Oil

Source: World Bank Note: Coconut oil (Philippines/Indonesia), bulk, c.i.f. Rotterdam and Palm kernel oil (Malaysia), c.i.f. Rotterdam

Global Outlook

4.11 As per World Bank, monthly international prices of coconut oil fell from US$ 1815 per tonne

in January 2017, to US$ 1549 in March 2017 but increased during the next quarter and were

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

Domestic Price 6636 6453 7767 1028 1208 1520 1553 1336 1366 1278 1143 9700 8233 7967 8733 1013 1266 1276 1400

International Price 4531 4698 5686 7293 8296 8295 7297 7341 7140 7076 6929 7314 8590 1024 1022 1056 1132 1066 1025

4000

6000

8000

10000

12000

14000

16000

18000

`/ q

tl.

600

800

1000

1200

1400

1600

1800

2000

Jan-

14

Mar

ch-1

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May

-14

July

-14

Sep-

14

Nov

-14

Jan-

15

Mar

ch-1

5

May

-15

July

-15

Sep-

15

Nov

-15

Jan-

16

Mar

ch-1

6

May

-16

July

-16

Sep-

16

Nov

-16

Jan-

17

Mar

ch-1

7

May

-17

July

-17

Pric

e($/

MT)

Coconut Oil Palm Kernel Oil

Note: Coconut Oil (Philippi and DES, DAC FW.nes/Indonesia), bulk, c.i.f., Rotterdam and domestic wholesale prices at Kochi.*Domestic and International prices are average price of July & August month for the 2017 Q3.Source: World Bank and DES, Ministry of Agriculture and Farmers Welfare

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Global Outlook

4.11 As per World Bank, monthly international prices of coconut oil fell from US$ 1815 per tonne in January 2017, to US$ 1549 in March 2017 but increased during the next quarter and were US$ 1604 per tonne in August 2017. Presently, domestic wholesale prices of copra as well coconut oil have been ruling above international prices, therefore, there is little scope for increasing coconut oil exports. However, as Indian coconut oil has quality advantage in export market and Indian diaspora has preference for coconut oil of Indian origin, export demand for Indian coconut oil may remain at the same level. World prices of coconut oil are forecast to decline marginally in 2018 while palm oil prices are forecast to rise marginally in 2018 (Table 4.1).

Table 4.1: Commodity Price Forecasts in Nominal US Dollars

Commodity Unit 2017 2018 2019 2020

Coconut oil $/mt 1600 1584 1567 1551

Palm oil $/mt 750 761 771 782

Commodity Price Forecasts in Constant US Dollars (2010 = 100)

Coconut oil $/mt 1689 1629 1579 1532

Palm oil $/mt 792 782 777 773

Source: World Bank, Commodity Market Outlook, April Qtr Report.

Chart 4.8: Domestic and International Prices of Coconut oil

Source: World Bank and DES, DAC FW. Note: Coconut Oil (Philippi and DES, DAC FW.nes/Indonesia), bulk, c.i.f., Rotterdam and domestic wholesale prices at Kochi. * Domestic and International prices are average price of July & August month for the quarter.

Chart 4.9: International Prices of Coconut Oil and Palm Kernel Oil

Source: World Bank Note: Coconut oil (Philippines/Indonesia), bulk, c.i.f. Rotterdam and Palm kernel oil (Malaysia), c.i.f. Rotterdam

Global Outlook

4.11 As per World Bank, monthly international prices of coconut oil fell from US$ 1815 per tonne

in January 2017, to US$ 1549 in March 2017 but increased during the next quarter and were

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

Domestic Price 6636 6453 7767 1028 1208 1520 1553 1336 1366 1278 1143 9700 8233 7967 8733 1013 1266 1276 1400

International Price 4531 4698 5686 7293 8296 8295 7297 7341 7140 7076 6929 7314 8590 1024 1022 1056 1132 1066 1025

4000

6000

8000

10000

12000

14000

16000

18000

`/ q

tl.

600

800

1000

1200

1400

1600

1800

2000Ja

n-14

Mar

ch-1

4

May

-14

July

-14

Sep-

14

Nov

-14

Jan-

15

Mar

ch-1

5

May

-15

July

-15

Sep-

15

Nov

-15

Jan-

16

Mar

ch-1

6

May

-16

July

-16

Sep-

16

Nov

-16

Jan-

17

Mar

ch-1

7

May

-17

July

-17

Pric

e($/

MT)

Coconut Oil Palm Kernel Oil

Chart 4.9: International Prices of Coconut Oil and Palm Kernel Oil

Note: Coconut oil (Philippines/Indonesia), bulk, c.i.f. Rotterdam and Palm kernel oil (Malaysia), c.i.f. RotterdamSource: World Bank

2018 SEASON28

Price Policy for

CopraTr

ade

Com

petiti

vene

ss o

f Cop

ra a

nd C

ocon

ut o

il

Trade Policy

4.12 Edible oils were under negative list of imports till April, 1994 when import of palmolein was placed under OGL subject to 65 percent import duty. Subsequently, imports of other edible oils were also placed under OGL. Import duty on edible oils was high, up to 80 percent on crude and 90 percent on refined, during early-2000s but was reduced to zero percent on crude and 7.5 percent on refined edible oils in April, 2008. Import duty on crude edible oils was 2.5 percent in January, 2013 which was increased to 7.5 percent in December, 2014 and to 12.5 percent in September, 2015. Import duty on refined edible oils was also increased to 10 percent in January, 2014 which was further increased to 15 percent in December, 2014 and to 20 percent in September, 2015. Import duty on crude palm oil and refined palm oil was reduced to 7.5 percent and 15 percent, respectively, vide notification dated 30th June 2017. However, due to steep fall in world prices of palm oil and domestic prices of oilseeds ruling below MSP, Government increased import duty on crude palm oil from 7.5 percent to 15 percent and on refined palm oil from 15 percent to 25 percent vide notification dated 11th August 2017. Import duty on crude soybean oil was also raised to 17.5 percent in August 2017. Import duty on crude coconut oil is 12.5 percent and 20 percent on other coconut oil. The bound duty, and applied duty on edible oils are given in Table 4.2.

Table 4.2: Bound Tariff and Applied Tariff on Edible Oils in India (Percent)

Description Bound Tariff Applied Tariff

Soybean Crude Oil 45 17.5

Soybean Edible Grade 45 20.0

Groundnut Oil Crude 300 12.5

Groundnut Edible Grade 300 20.0

Palm Crude Oil 300 15.0

Other Refined Palm Oil 300 25.0

Crude Sunflower Oil 300 12.5

Sunflower Oil Edible Grade 300 20.0

Crude Coconut Oil 300 12.5

Other Coconut Oil 300 20.0

Crude Mustard Oil 75 12.5

Refined Mustard Oil 75 20.0

Refined Rapeseed Oil of Edible Grade 75 20.0

Source: Central Board of Excise and Customs and Directorate General of Foreign Trade

2018 SEASON29

Price Policy for

Copra

Cost

s, R

etur

ns a

nd P

rofit

abili

ty

Recapitulation

4.13 Domestic prices of copra and coconut oil are ruling higher than the international prices and large gap between coconut oil and palm kernel oil prices will restrict the scope to increase export of coconut oil. Therefore, it is suggested to focus on the exports of other products of coconut like desiccated coconut, fresh coconut products and other value-added products which have good demand in international market.

*****

2018 SEASON30

Price Policy for

Copra

Costs, Returns and Profitability

Chap

ter 5

Chap

ter

5

5.1 The Commission considers both demand and supply side factors while determining the Minimum Support Price (MSP). Cost of production (CoP), which represents supply side of production, is an important factor in determination of MSP. The demand side factors are influenced by the consumption demand for coconut oil and other products as well as prices in domestic and international markets. In addition, inter-crop price parity, terms of trade between agriculture and non-agriculture sector, likely impact of MSP on consumers and overall economy and rational utilization of production resources are also considered. Thus, cost is an important factor but not the only factor in determining the MSP.

5.2 The Commission uses state-wise cost estimates provided by the Directorate of Economics & Statistics (DES), Ministry of Agriculture and Farmers Welfare compiled under ‘Comprehensive Scheme (CS) for studying the Cost of Cultivation of Principal Crops in India’. The actual costs of production estimates are available with a lag of two years. The Commission, therefore, projects the state-wise and all-India level cost of production for the coming season for which MSP has to be recommended and uses these projected costs for recommending MSP.

5.3 The projected cost of cultivation (CoC) of Copra for 2018 season is based on actual cost estimates available for Kerala and Tamil Nadu for the years 2013-14, 2014-15 and 2015-16. The projections of CoC capture movement in overall input cost separately for the crop season 2018 over each of the past three years viz. 2013-14, 2014-15 and 2015-16. The Commission constructs the Composite Input Price Index (CIPI) (base 2011-12=100) based on latest prices of main inputs like human labour, bullock labour, machine labour, manures, fertilisers, seeds, pesticides and irrigation as per data available from various sources such as Labour Bureau, State Governments, Office of Economic Adviser, Ministry of Commerce & Industry, etc. The CIPI is used to assess the likely changes in input costs for the crop year 2018 with reference to each of the above-mentioned three consecutive years. Based on CIPI, the Commission projects CoC for A2+FL and C2 and Cost of Production (CoP) is then derived from this projected CoC using the projected yield.

2018 SEASON31

Price Policy for

Copra

Cost

s, R

etur

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nd P

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abili

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5.4 The Commission projects costs based on latest three year cost estimates for each state under certain implicit assumptions. One, since projections are made two years ahead, it is assumed that fixed cost component would not undergo any significant change in the intervening period. Two, as yield levels vary from year to year due to multiple factors, cost projections for the last three years have been undertaken for each state to smoothen fluctuations in yield and hence in cost of production.

Costs, Returns and Profitability of Coconut: TE2015-165.5 Table 5.1 gives costs, returns and profitability of coconut in Kerala and Tamil Nadu

during TE2015-16. The gross value of output is estimated at the prevailing market prices during harvest season in the village/cluster of villages where the crop is grown and harvested.

5.6 To estimate profitability of coconut, gross returns over cost A2 (gross value of output (GVO) less cost A2), gross returns over A2+FL (GVO less cost A2+FL) and net returns, which represent GVO less cost C2 are calculated. For the state of Kerala, the average gross returns over A2+FL cost is `63,661 per hectare, with rate of return over A2+FL being 72 percent during TE2015-16. The net rate of return over C2 costs is estimated as 26 percent during the same period. In case of Tamil Nadu, average rate of returns over A2+FL and C2 cost are 161 percent and 59 percent, respectively. However, both states witnessed a significant decline in coconut profitability during 2015-16 compared to 2014-15, mainly due to severe drought conditions. The results clearly show that profitability of coconut is significantly higher in Tamil Nadu compared with Kerala due to higher productivity and lower costs in Tamil Nadu. Therefore, efforts are needed to improve yield and reduce cost of cultivation in Kerala to make coconut farming profitable and competitive.

Table 5.1: Gross and Net Returns of Coconut, TE2015-16

Year

Cost A2

Cost A2+FL Cost C2 GVO Gross Returns over A2

Gross Returns over A2+FL Net Returns over C2

`/ha`/ha

(Col.5-Col.2)

Percent (Col.6/

Col.2*100)

`/ha (Col.5-Col.3)

Percent (Col.8/

Col.3*100)

`/ha (Col.5-Col.4)

Percent (Col.10/

Col.4*100)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Kerala

2013-14 53916 66669 89345 109806 55890 104 43137 65 20461 23

2014-15 76652 93182 134823 197594 120942 158 104412 112 62772 47

2015-16 86214 106637 139208 150072 63858 74 43435 41 10864 8

Average 72261 88829 121125 152491 80230 111 63661 72 31365 26

Tamil Nadu

2013-14 39276 53500 86740 125049 85773 218 71549 134 38310 44

2014-15 44272 67643 103215 206291 162019 366 138648 205 103076 100

2015-16 43963 65789 115475 155645 111682 254 89857 137 40170 35

Average 42504 62311 101810 162328 119825 282 100018 161 60519 59

Source: CACP, using DES data

2018 SEASON32

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and

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Labour and Input Price Movement

5.7 Coconut is a labour-intensive crop, so increase in agricultural wages has led to an increase in cost of cultivation. Human labour has the highest share in cost of production and accounts for 47 percent of total cost, followed by land (28 percent) and fertiliser (13 percent).

Chart 5.1: Share of Major Inputs in Total Cost of Production (C2), TE2015-16

Table 5.1: Gross and Net Returns of Coconut, TE2015-16

Year

Cost A2

Cost A2+FL Cost C2 GVO Gross Returns over

A2 Gross Returns over

A2+FL Net Returns over C2

`/ha `/ha

(Col.5-Col.2)

Percent (Col.6/

Col.2*100)

`/ha (Col.5-Col.3)

Percent (Col.8/

Col.3*100)

`/ha (Col.5-Col.4)

Percent (Col.10/

Col.4*100)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Kerala

2013-14 53916 66669 89345 109806 55890 104 43137 65 20461 23

2014-15 76652 93182 134823 197594 120942 158 104412 112 62772 47

2015-16 86214 106637 139208 150072 63858 74 43435 41 10864 8

Average 72261 88829 121125 152491 80230 111 63661 72 31365 26

Tamil Nadu

2013-14 39276 53500 86740 125049 85773 218 71549 134 38310 44

2014-15 44272 67643 103215 206291 162019 366 138648 205 103076 100

2015-16 43963 65789 115475 155645 111682 254 89857 137 40170 35

Average 42504 62311 101810 162328 119825 282 100018 161 60519 59

Source: CACP, using DES data

Labour and Input Price Movement

5.7 Coconut is a labour-intensive crop, so increase in agricultural wages has led to an increase in

cost of cultivation. Human labour has the highest share in cost of production and accounts

for 47 percent of total cost, followed by land (28 percent) and fertiliser (13 percent).

Chart 5.1: Share of Major Inputs in Total Cost of Production (C2), TE2015-16

Source: CACP calculations.

Human Labour47%

Land28%

Fertilizer13%

Capital7%

Others5%

5.8 The Commission has examined trends in agricultural daily wage rates, based on data provided by the Labour Bureau, Shimla. Table 5.2 presents annual average growth in wage rates of agricultural labour in nominal and real terms (2016-17=100) in major coconut growing states and at all-India level during last three years. At all-India level, agricultural labour wages increased by 12.7 percent in 2014-15, 5.1 percent in 2015-16 and 5.8 percent in 2016-17 at current prices. The increase in real wages was 5.4 percent, (-) 2.2 percent and 0.3 percent in the corresponding years. Chart 5.2 depicts state-wise average daily wages of agricultural labour in 2016-17 and rate of growth in wages during 2016-17 over 2015-16. The wage rate is the highest (`673/day) in Kerala and the lowest in Andhra Pradesh (`276/day). The highest rate of increase in wages is reported for Andhra Pradesh (7.9 percent) and the lowest increase (1.6 percent) in Kerala. Given the fact that wage rates have been rising and there is shortage of labour, it is high time to respond to this situation by promoting mechanization in planting, harvesting and other intercultural operations. The state-wise and all-India details of monthly average daily wage rates (nominal terms) of agricultural labour in major coconut growing states are given in Annex Table 5.1.

Source: CACP calculations.

2018 SEASON33

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Table 5.2: Average Annual Growth in Wages of Agricultural Labour by States and all-India Level

StateGrowth (percent) at Current

PricesGrowth (percent) at Constant

Prices (2016-17=100)

2014-15 2015-16 2016-17 2014-15 2015-16 2016-17Andhra Pradesh 7.3 6.5 7.9 0.7 -0.02 4.8Karnataka 9.1 12.6 6.0 2.7 4.0 -1.2Kerala 11.4 6.4 1.6 2.4 1.9 -4.3Tamil Nadu 23.9 -4.0 4.4 14.7 -11.6 -1.6All-India 12.7 5.1 5.8 5.4 -2.2 0.3

Note: Average is from July to June.Source: Labour Bureau, Shimla

Chart 5.2: Average Daily Wage Rate of Agricultural Labour 2016-17 and Growth in Wages in 2016-17 over 2015-16

5.9

Chart 5.2

Note: AverSource: Lab

9 Chart 5.3

farm inpu

index of

percent,

electricit

declined

A

G

2: Average D

rage is from Julbour Bureau, S

3 presents tr

uts during M

high speed

respectively

y, lube oils,

in the range

Avg Daily Wage

Growth in wage

Aver

age

Daily

Wag

es(`

)

Daily Wage R

ly to June Shimla

rends in who

May-July 201

diesel (HSD)

y, while wh

, cattle feed

e of 0.1 perc

es

es 2016-17

0

100

200

300

400

500

600

700

Aver

age

Daily

Wag

es (`)

Rate of Agric2016-17

olesale price

17 over May

) and agricu

olesale pric

d, fodder an

cent to 6.1 p

Kerala Ta

673

1.6

cultural Labover 2015-1

e index (with

-July 2016. T

ltural tracto

ce index of

nd pesticide

ercent (deta

mil Nadu A

411

4.4

our 2016-1716

h base year 2

The chart sh

rs increased

fertilizers an

es and othe

ails in Annex

ll-India Kar

330

5.8

7 and Growt

2011-12 = 1

ows that wh

d by 11.2 pe

nd nitrogen

r agrochem

x Table 5.2).

rnataka AnPra

298 2

6.0

th in Wages

00) for majo

holesale pric

rcent and 0.

compound

ical product

ndhra adesh

276

7.9

0123456789

Gth

(Pt)

in

or

ce

.7

s,

ts

Grow

th (

Perc

ent)

5.9 Chart 5.3 presents trends in wholesale price index (with base year 2011-12 = 100) for major farm inputs during May-July 2017 over May-July 2016. The chart shows that wholesale price index of high speed diesel (HSD) and agricultural tractors increased by 11.2 percent and 0.7 percent, respectively, while wholesale price index of fertilizers and nitrogen compounds, electricity, lube oils, cattle feed, fodder and pesticides and other agrochemical products declined in the range of 0.1 percent to 6.1 percent (details in Annex Table 5.2).

Note: Average is from July to JuneSource: Labour Bureau, Shimla

2018 SEASON34

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and

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ility

Chart 5.3: Movements in Prices of Farm Inputs (May-July, 2017 over May-July, 2016)

5.1

5.1

Chart

Source: DIP

Cost Proj

10 The cost

estimate

nut proc

copra pro

nut work

up of act

given in A

11 Based on

milling co

productio

work out

season. T

Nadu. Fu

at `5007

transport

out to be

t 5.3: Movem

PP, Ministry of

jection of Co

ts per nut f

s of coconu

essing charg

ovided by th

ked out to `

tual cost esti

Annex Table

n the state-w

opra has bee

on of milling

t to be `604

The C2 cost i

urther, the a

7 and `773

tation, mark

e `7822 per

Price Index (May

Price Index (May

Change in Price (

Perc

ent

ments in Pri

f Commerce an

opra for 201

for Kerala a

t received u

ges of conve

he State gov

`11.00 for Ke

imates in res

e 5.3.

wise costs a

en arrived at

g copra in TE

42 per quint

s projected

all-India proj

37 per quin

keting charg

quintal at al

HiSpeDie(HS

y-July,2016) 7

y-July,2017) 8

(%) 11

-10-8-6-4-202468

101214

ces of Farm

nd Industry

18 Season

and Tamil N

under CS. Fu

erting cocon

vernments h

erala and `7

spect of Ker

nd CIPI, an a

t with weigh

E2016-17. Th

al for Kerala

at `8923 pe

ected A2+FL

ntal, respec

ges and crop

ll-India level

gh eed esel SD)

Fertilizers and

nitrogen compoun

ds

72 121

80 117

1.2 -3.1

Inputs (Ma

Nadu are pro

urther to arr

nut to copra

have been u

7.19 for Tam

ala and Tam

all-India wei

hts being rel

he paid out

a and `3953

er quintal fo

L cost and C2

ctively. The

p insurance

.

Electricity Agrical tra

103 11

102 11

-0.3 0

y-July, 2017

ojected on

rive at per q

a and numb

used. The av

mil Nadu for

mil Nadu for

ighted avera

ative shares

costs includ

per quintal

or Kerala, `6

2 cost for 20

modified C

premium of

culturactors Lube Oils

13 121

14 113

.7 -6.1

7 over May-J

the basis o

quintal cost

er of nuts p

verage proje

2018 seaso

2014-15 and

age cost of p

s of the state

ding family la

for Tamil N

528 per qui

018 season a

C2 cost, wh

f `85 per qu

Cattle Feed Fod

159 1

156 1

-1.6 -4

July, 2016)

of actual cos

of copra, pe

per quintal o

cted cost pe

n. The break

d 2015-16 ar

production o

es in the tot

abour (A2+F

Nadu for 201

ntal for Tam

are estimate

hich include

uintal), work

dder

Pesticides and other agrochemi

cal products

67 118

59 118

4.9 -0.1

st

er

of

er

k-

re

of

al

L)

18

mil

ed

es

ks

-160-120-80-4004080120160200240

WPI

Cost Projection of Copra for 2018 Season

5.10 The costs per nut for Kerala and Tamil Nadu are projected on the basis of actual cost estimates of coconut received under CS. Further to arrive at per quintal cost of copra, per nut processing charges of converting coconut to copra and number of nuts per quintal of copra provided by the State governments have been used. The average projected cost per nut worked out to `11.00 for Kerala and `7.19 for Tamil Nadu for 2018 season. The break-up of actual cost estimates in respect of Kerala and Tamil Nadu for 2014-15 and 2015-16 are given in Annex Table 5.3.

5.11 Based on the state-wise costs and CIPI, an all-India weighted average cost of production of milling copra has been arrived at with weights being relative shares of the states in the total production of milling copra in TE2016-17. The paid out costs including family labour (A2+FL) work out to be `6042 per quintal for Kerala and `3953 per quintal for Tamil Nadu for 2018 season. The C2 cost is projected at `8923 per quintal for Kerala, `6528 per quintal for Tamil Nadu. Further, the all-India projected A2+FL cost and C2 cost for 2018 season are estimated at `5007 and `7737 per quintal, respectively. The modified C2 cost, which includes transportation, marketing charges and crop insurance premium of `85 per quintal, works out to be `7822 per quintal at all-India level.

5.12 Charts 5.4a & b show cost of production of milling copra by states and all-India level in ascending order of cost with the corresponding relative shares in the total production. It may be noted that all-India cost of production A2+FL and C2 of milling copra is `5007 per quintal and `7737 per quintal, respectively.

Source: DIPP, Ministry of Commerce and Industry

2018 SEASON35

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Copra

Cost

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Chart 5.4a: Supply Curve and Projected Cost (A2+FL) of Milling Copra, 2018 Season

5.12 Charts 5.4a & b show cost of production of milling copra by states and all-India level in

ascending order of cost with the corresponding relative shares in the total production. It

may be noted that all-India cost of production A2+FL and C2 of milling copra is `5007 per

quintal and `7737 per quintal, respectively.

Chart 5.4a: Supply Curve and Projected Cost (A2+FL) of Milling Copra, 2018 Season

Source: CACP calculations.

Chart 5.4b: Supply Curve and Projected Cost (C2) of Milling Copra, 2018 Season

Source: CACP calculations.

0

1000

2000

3000

4000

5000

6000

7000

80001 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100

Cost

of P

rodu

ctio

n (`

/qtl)

Production Shares (Percent)

Tamil Nadu Kerala All India A2+FL Cost = Rs 5007/qtl MSP Recommended = Rs 7500/qtl

All India A2+FL Cost = ` 5007/qtl

MSP Recommended = ` 7500/qtl

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100

Cost

of P

rodu

ctio

n (`

/qtl)

Production Shares (Percent)

Tamil Nadu Kerala All India C2 Cost = Rs 7737/qtl MSP Recommended = Rs 7500/qtl

All India C2 Cost = ` 7737/qtl

MSP Recommended = ` 7500/qtl

5.12 Charts 5.4a & b show cost of production of milling copra by states and all-India level in

ascending order of cost with the corresponding relative shares in the total production. It

may be noted that all-India cost of production A2+FL and C2 of milling copra is `5007 per

quintal and `7737 per quintal, respectively.

Chart 5.4a: Supply Curve and Projected Cost (A2+FL) of Milling Copra, 2018 Season

Source: CACP calculations.

Chart 5.4b: Supply Curve and Projected Cost (C2) of Milling Copra, 2018 Season

Source: CACP calculations.

0

1000

2000

3000

4000

5000

6000

7000

8000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100

Cost

of P

rodu

ctio

n (`

/qtl)

Production Shares (Percent)

Tamil Nadu Kerala All India A2+FL Cost = Rs 5007/qtl MSP Recommended = Rs 7500/qtl

All India A2+FL Cost = ` 5007/qtl

MSP Recommended = ` 7500/qtl

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100

Cost

of P

rodu

ctio

n (`

/qtl)

Production Shares (Percent)

Tamil Nadu Kerala All India C2 Cost = Rs 7737/qtl MSP Recommended = Rs 7500/qtl

All India C2 Cost = ` 7737/qtl

MSP Recommended = ` 7500/qtl

Chart 5.4b: Supply Curve and Projected Cost (C2) of Milling Copra, 2018 Season

Source: CACP calculations.

Returns of Coconut versus Paddy5.13 Returns of coconut and paddy are compared and given in Table 5.3. These two crops

are not inter-substitutable but comparison is made to examine returns of coconut and paddy. Table presents returns measured over A2, A2+FL and C2 for coconut with reference to paddy. It is noted that, on an average, returns (both gross and net) from coconut cultivation are significantly higher compared to those under paddy cultivation in Tamil Nadu. Whereas, in Kerala, gross returns over A2, A2+FL and net returns over C2 are higher in paddy compared with coconut. Main reason for low returns from coconut cultivation in Kerala is low productivity level and that needs to be addressed.

Source: CACP calculations.

2018 SEASON36

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Table 5.3: Comparative Returns of Coconut versus Paddy

YearCost A2 Cost A2+FL Cost C2 GVO

Gross Returns over A2

Gross Returns

over A2+FLNet Returns

`/ha `/ha (Col.5-Col.2)

`/ha (Col.5-Col.3)

`/ha (Col.5-Col.4)

(1) (2) (3) (4) (5) (6) (7) (8)Coconut-Kerala

2012-13 25405 30885 38892 38802 13397 7917 -912013-14 26958 33334 44672 54903 27945 21568 102302014-15 38326 46591 67411 98797 60471 52206 31386Average 30229 36937 50325 64167 33938 27230 13842

Paddy-Kerala2012-13 42205 44413 61404 83621 41416 39208 222172013-14 46470 49665 68551 93832 47361 44167 252812014-15 49912 53392 71972 89927 40015 36535 17955Average 46195 49157 67309 89127 42931 39970 21818

Coconut-Tamil Nadu2012-13 20969 29650 40447 48522 27553 18872 80752013-14 19638 26750 43370 62525 42887 35774 191552014-15 22136 33822 51608 103146 81010 69324 51538Average 20914 30074 45141 71397 50483 41324 26256

Paddy-Tamil Nadu2012-13 43027 51157 65991 78442 35415 27285 124512013-14 44879 55479 71512 79772 34894 24293 82602014-15 46404 55779 74077 76294 29890 20515 2217Average 44770 54138 70527 78169 33400 24031 7643

Note: Coconut is an annual crop whereas paddy is biannual crop. For comparing coconut returns with paddy returns, coconut returns are divided by two.Source: CACP Calculations.

Recapitulation

5.14 Given the time lag of two years in availability of cost of cultivation estimates from the DES, the Commission has projected the cost of production for the season 2018 based on CIPI. The CS estimates are available for three states viz, Kerala, Tamil Nadu and Karnataka. As the CS data for Karnataka is based on a very small sample size, it was not included in the cost analysis. The Commission recommends that the comprehensive scheme should cover Andhra Pradesh and sufficiently large sample from Karnataka for more reliable and representative estimates of cost of production of coconut at all-India level. Based on the CS data for Kerala and Tamil Nadu, the all-India weighted average cost A2+FL and C2 cost of milling copra are projected at

2018 SEASON37

Price Policy for

Copra

Cost

s, R

etur

ns a

nd P

rofit

abili

ty

5007 per quintal and 7737 per quintal, respectively, for 2018 season. The modified C2 cost inclusive of cost of transportation, marketing and insurance premium is projected at `7822 per quintal. Given high share of labour at 47 percent in the total cost of production (C2) coupled with non-availability of labour and high wage rates, it is appropriate to promote mechanization of coconut farming operations, particularly harvesting. This is all the more important as the cost of labour in relation to the cost of capital is likely to increase in coming years.

*****

2018 SEASON38

Price Policy for

Copra

Considerations and Recommendations for Price Policy

Chap

ter 6

Chap

ter

6

6.1 While recommending MSP for milling copra and ball copra for the 2018 season, the Commission has carefully considered cost of production of copra, trends in the domestic and international prices and overall demand and supply of copra and coconut and other edible oils, cost of conversion of copra into coconut oil and the likely impact of the recommended MSP on consumers. Coconut production in India witnessed a declining trend during 2012-13 to 2014-15 but increased by 8.5 percent in 2015-16 and 10.4 percent in 2016-17. The increase was mainly due to increase in production in Kerala by almost 52 percent in 2015-16 due to a significant increase in both area and yield.

Price Trends

6.2 After a significant decline in prices of copra during 2015 and 2016, both milling and ball copra prices have rebounded to close to historic highs. The increase in coconut oil prices is primarily due to lower supply of coconut from Tamil Nadu, Andhra Pradesh and Karnataka which suffered two consecutive years of drought and also strong festival season demand. Since a strong relationship exists between prices of milling copra and coconut oil, the prices of coconut oil have also shown a rising trend. Coconut oil prices in Kochi, one of the largest market, which ruled around `7700 per quintal in June-July last year, have now moved up to `14,600 in August 2017, an increase of over 90 percent.

Productivity Trends

6.3 The productivity in the major coconut producing state of Kerala is lower even less than the All-India average. The main reasons for low productivity of coconut are, senile and unproductive plantations, incidence of diseases and pests mainly root (wilt) disease, scarcity of irrigation water and poor crop management. Hence, massive replanting of senile old palms with quality planting material, establishing nurseries in both private and public sector for production of quality seedlings,

2018 SEASON39

Price Policy for

Copra

Cons

ider

ation

s and

Rec

omm

enda

tions

for P

rice

Polic

y

effective management of diseases and pests and efficient management of inputs including irrigation water are essential for increasing productivity.

Procurement of De-husked Fresh Coconut

6.4 Majority of coconut farmers are small and marginal and do not have adequate dryer/conversion facilities for timely conversion of coconut into copra and scientific and quality storage facilities. Therefore, most of them sell their produce as raw nuts and do not benefit from MSP operations. In order to make MSP and price support scheme effective, vibrant farmer’s collectives/groups like producer cooperatives, Self Help Group (SHGs), coconut producer societies/companies should be involved in procurement of de-husked coconut and equipped with scientific dryer/processing facilities for production of Fair Average Quality (FAQ) copra. Central and State government should provide financial and technical assistance to strengthen such institutions and create necessary infrastructure. Such organizations can also be designated as state level agencies for copra procurement operations. Some states have launched programmes for procurement of green coconuts from farmers through state departments/agencies but with a limited success. However, Commission is of the view that in the event of market prices of de-husked coconut falling below support price, the state government should go for direct benefit transfer (difference between support price and market price) to farmers rather than government-supported procurement of raw coconuts.

Extend Procurement Period

6.5 Assured remunerative and stable prices to coconut farmers are of utmost importance for encouraging farmers to adopt new practices and technologies to improve productivity and production. Government intervention in the event of falling prices is necessary to ensure remunerative prices to producers. The PSS operations in case of copra procurement were extended from 90 days to six months in a calendar year in 2016 but in the light of pattern of market arrivals in the country, this needs to be revisited. During Commission’s discussions with the coconut growers and other stakeholders, it was observed that as market arrivals of coconut are well distributed throughout the year, procurement operations need to be extended to whole year in case market prices fall below MSP.

Value-Addition and Product Diversification

6.6 There is tremendous potential for production and sale of value-added products in domestic and world markets but only a small proportion of total production of coconuts is used for conversion into high-value products like coconut jelly, candy, neera, coconut drinks, coconut wine and vinegar. There is a general decline in consumption of coconut oil in household and other sectors in major consuming states due to availability of low-priced competing palm oil. Under these changed consumption patterns and availability of cheap substitutes, more emphasis needs

2018 SEASON40

Price Policy for

CopraCo

nsid

erati

ons a

nd R

ecom

men

datio

ns fo

r Pric

e Po

licy

to be put on diversification into value-added products, which will make the sector more profitable and competitive.

Challenges Faced by Coconut Sector

6.7 The coconut sector is confronted with a number of constraints and challenges such as low and fluctuating productivity due to old and senile plantations, shortage of quality planting material, incidence of diseases and insect-pests, poor management of the farms, shortage of skilled manpower, lack of assured irrigation facilities, poor post-harvest management and infrastructure, lack of access to assured market, and competition from substitute oils. The challenges facing coconut sector need to be addressed through focusing on sustained improvement in productivity, value-addition and strong market linkages.

Productivity Improvement

6.8 Main coconut producing states should frame a state-specific policy for rejuvenation/replanting of coconut plantation with high quality planting material in a time bound manner. Private sector including farmers should be encouraged and incentivized to establish nurseries for production of quality planting material with a system of accreditation of nurseries to ensure quality standards.

Promotion of Inter-cropping for Higher Income

6.9 Coconut provides great scope for mixed/inter-cropping and various technologies have been developed by ICAR/SAUs for coconut based inter/mixed, multi-storeyed multi-species cropping systems. Banana, cocoa, pineapple, black pepper, etc. are some of the most suitable crops to grow as intercrops with coconut trees. These technologies need to be promoted among farmers to maximise farm profitability and reduce risks.

Farm Mechanisation

6.10 Labour availability including rising wages is a major constraint in coconut farming but mechanization in coconut farming has not progressed much as attempts made to develop devices for coconut cultivation were not very successful. The Commission recommends that ICAR/SAUs should be assigned the task of designing an appropriate machine for coconut harvesting in a time-bound manner.

Climate Change

6.11 Climate change is projected to have negative impact on coconut productivity in Andhra Pradesh, Odisha, West Bengal, Gujarat and parts of Karnataka and Tamil Nadu. Agronomic adaptations like soil moisture conservation, summer irrigation, drip irrigation, and fertilizer application can not only minimize losses in majority of coconut growing regions but also improve productivity. However, current poor

2018 SEASON41

Price Policy for

Copra

Cons

ider

ation

s and

Rec

omm

enda

tions

for P

rice

Polic

y

management practices and scarcity of irrigation water may become limiting factors in reaping the benefits. Therefore, development of water harvesting structures and moisture conservation measures to improve soil moisture and thereby mitigating the adverse effects of climate change should be given priority.

Costs and Profitability of Coconut

6.12 The all-India weighted average A2+FL and C2 cost of milling copra are projected at ` 5007 per quintal and ` 7737 per quintal, respectively, for 2018 season. The modified C2 cost inclusive of costs of transportation, marketing and insurance premium of milling copra is projected at ` 7822 per quintal. These projected costs along with other relevant factors have been considered in formulation of price policy recommendations. The share of labour in the total cost of cultivation is high (47 percent) due to fast growth in wages. Therefore, it is important that farm mechanization be promoted for improving productivity and profitability and also reducing human drudgery. The DES provides CS data only for two states viz; Kerala and Tamil Nadu and CACP in its earlier reports had recommended that comprehensive scheme be extended to Andhra Pradesh and Karnataka for better representative estimates.

Cost of Production and MSP of Copra

6.13 Considering all the above factors, the Commission recommends that MSP of milling copra and ball copra be fixed at 7500 per quintal and 7750 per quintal, respectively for 2018 season. This MSP of milling copra would give gross margins of 49.8 percent. The Commission is of the considered opinion that these recommendations would go a long way in enhancing the profitability and productivity of the coconut sector.

(Vijay Paul Sharma)Chairman

(Shailja Sharma)Member Secretary

07th September, 2017

2018 SEASON42

Price Policy for

Copra

Annex Tables

2018 SEASON43

Price Policy for

CopraAnnex Table 1.1: Minimum Support Prices of Copra

(`/qtl.)

YearRecommended by the CACP Fixed by the Government

Milling Copra Ball Copra Milling Copra Ball Copra

2001 3250 3500 3300 3550

2002 3300 3550 3300 3550

2003 3320 3570 3320 3570

2004 3500 3750 3500 3750

2005 3570 3820 3570 3820

2006 3590 3840 3590 3840

2007 3620 3870 3620 3870

2008 3660 3910 3660 3910

2009 4450 4700 4450 4700

2010 4450 4700 4450 4700

2011 4525 4775 4525 4775

2012 5100 5350 5100 5350

2013 5100 5350 5250 5500

2014 5250 5500 5250 5500

2015 5550 5830 5550 5830

2016 5950 6240 5950 6240

2017 6500 6750 6500 6785

2018 SEASON44

Price Policy for

Copra

(Contd..)

Annex Table 2.1: Coconut - State-Wise Area, Production and Yield

(‘ooo hectares, ‘000 tonnes, tonnes/ha)

State 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*

Andhra Pradesh

Area 104.0 142.0 128.9 121.9 106.0 103.9 104.6

Prod 667.0 1270.0 1330.4 1258.4 1007.3 982.4 1439.2

Yield 6413 8942 10321 10322 9504 9451 13762

Assam

Area 18.8 20.8 22.2 20.2 21.1 19.7 24.7

Prod 101.0 194.8 110.3 94.0 163.5 91.3 118.3

Yield 5372 9375 4977 4647 7732 4625 4786

Gujarat

Area 16.0 20.9 21.1 31.6 31.6 22.8 23.0

Prod 108.0 217.9 221.9 203.1 203.1 215.2 217.3

Yield 6758 10410 10506 6420 6420 9433 9433

Karnataka

Area 419.0 511.0 513.1 517.3 515.0 526.4 513.9

Prod 1497.0 3784.6 4169.9 3469.5 3538.3 3529.8 4671.1

Yield 3573 7406 8127 6707 6870 6706 9090

Kerala

Area 788.0 766.0 798.2 797.2 649.8 770.6 771.1

Prod 3992.0 3973.9 3990.4 4107.4 3370.0 5113.1 5136.0

Yield 5066 5188 4999 5152 5186 6635 6661

Maharashtra

Area 21.0 21.0 28.1 28.1 28.1 27.7 27.8

Prod 120.0 120.0 129.0 129.0 129.0 186.7 190.7

Yield 5714 5714 4594 4594 4591 6728 6858

Odisha

Area 51.0 53.9 54.3 50.8 50.7 50.9 50.9

Prod 190.0 258.0 262.2 223.6 223.6 226.0 225.5

Yield 3725 4784 4829 4404 4412 4440 4430

2018 SEASON45

Price Policy for

Copra

Annex Table 2.1: Coconut - State-Wise Area, Production and Yield (‘ooo hectares, ‘000 tonnes, tonnes/ha)

State 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*

Tamil Nadu

Area 390.0 430.7 465.1 465.1 465.1 459.7 452.9

Prod 3692.0 4515.6 4760.7 4760.7 4760.8 4247.1 4184.4

Yield 9467 10485 10236 10236 10236 9238 9240

Telangana

Area

1.6 1.7 0.5 0.5

Prod 16.6 17.4 0.0 1.5

Yield 10321 10344 21 2940

Tripura

Area 5.8 6.2 6.5 6.9 6.9 7.2 7.1

Prod 8.0 18.1 18.9 19.5 19.5 20.3 20.1

Yield 1379 2908 2920 2819 2820 2820 2820

West Bengal

Area 28.6 29.1 29.2 29.3 29.4 29.5 29.6

Prod 245.0 252.9 254.2 255.2 256.2 257.1 258.3

Yield 8566 8680 8704 8711 8711 8712 8720

All India

Area 1895.9 2070.8 2136.7 2140.5 1975.8 2088.5 2076.4

Prod 10840.0 14939.9 15609.1 14910.7 14067.2 15256.3 16837.0

Yield 5718 7214 7305 6966 7120 7305 8109

Note: * 3rd Advance EstimatesThe conversion factor used to convert number of nuts into tonnes is 1453.24 units per tonne. Source : Horticulture Division of DAC&FW

2018 SEASON46

Price Policy for

CopraAn

nex

Tabl

e 2.

2: C

ocon

ut :

Mon

th-e

nd W

hole

sale

Pric

es

(`/’

000

nuts

)St

ate/

Cent

re/

Varie

ty Y

ear

Jan

Feb

Mar

ch A

pril

May

Jun

e J

uly

Aug

ust

Sep

t O

ct N

ov D

ec

Andh

ra P

rade

sh

(Raj

ahm

undr

y)

(New

)

2010

3600

3500

-

-

-

-

-

-

-

-

-

-

2011

-

6000

5500

5000

3500

4300

3600

3300

3700

3200

2700

2300

2012

2800

2500

2500

2500

2700

3200

3700

2800

3200

3000

3800

4200

2013

6000

5800

5000

5200

4300

4200

5000

6000

5300

8000

7500

7000

2014

7500

8500

9000

8000

8000

7200

8000

9000

8500

8000

6500

7000

2015

9500

9000

1200

013

000

1100

011

000

9000

1000

012

000

1100

010

000

1000

020

1670

0060

0060

0070

0060

0060

0060

0075

0050

0060

0065

0080

0020

1790

0010

000

9000

9000

1000

010

000

1000

010

000

1000

0Ka

rnat

aka

(A

rsik

ere)

(Med

ium

)20

1045

0043

0048

0050

0049

0045

00

-41

0048

5046

0046

0046

0020

1165

0050

0050

0053

0065

0068

2076

0070

0073

5060

0060

0060

0020

1255

0055

0065

0050

0050

0060

0055

0065

0060

0050

0054

8570

0020

1365

0065

0065

0065

0085

0080

0065

0065

0055

0055

0067

8055

0020

1466

0062

0080

0080

0010

500

7000

7000

9600

9000

1000

011

000

1200

020

1580

0016

000

1310

013

500

1444

012

000

1300

010

000

9500

-

9700

1000

020

1610

000

1000

010

000

8200

9050

7000

7125

8300

9000

7000

7000

7000

2017

1250

013

000

1900

012

666

1200

012

000

1300

019

000

1900

0Ka

rnat

aka

(M

anga

lore

)

(Sor

t I)

2010

7000

7250

6700

6700

-67

0072

0070

0075

0085

0085

0090

0020

1190

0095

0085

0090

0090

0085

0090

0010

000

1025

010

500

1025

010

500

2012

1025

090

0096

0010

000

9600

9500

9000

9600

9600

9600

9650

1050

020

1310

500

1005

090

0090

0090

0090

0090

0011

000

1100

011

000

1100

011

000

2014

1100

012

000

1200

012

000

1205

012

000

1200

015

150

1400

018

000

1800

016

500

2015

1800

018

000

1800

018

000

1700

018

000

1700

016

000

1600

018

000

1800

018

000

2016

1600

015

000

1500

015

000

1500

012

500

1300

013

000

1350

014

500

1450

014

500

2017

1500

020

000

2000

020

000

2000

020

000

2100

021

000

2150

0Ka

rnat

aka

(M

anga

lore

)

(Sor

t II)

2010

5600

5600

5850

5500

5500

-

5500

6000

5500

5500

5000

5000

2011

5500

6000

6900

7200

7200

6500

6500

6500

6500

7500

5500

5500

2012

6000

5800

5250

5400

5500

5600

5750

5500

5500

5500

5550

8800

2013

8000

8050

7000

7000

7000

7000

7000

9000

9000

9000

9000

9000

2014

9000

9200

9200

9200

9250

9250

1000

010

600

1300

013

000

1300

013

000

2015

1250

012

500

1250

012

500

1200

012

000

1150

011

500

1150

012

000

1150

011

500

2016

1100

090

0090

0090

0090

0080

0080

0080

0085

0010

000

1000

090

0020

1790

0010

000

1000

011

000

1100

010

000

1100

011

000

1100

0(C

ontd

..)

2018 SEASON47

Price Policy for

CopraAn

nex

Tabl

e 2.

2: C

ocon

ut :

Mon

th-e

nd W

hole

sale

Pric

es

(`/’

000

nuts

)St

ate/

Cent

re/

Varie

ty Y

ear

Jan

Feb

Mar

ch A

pril

May

Jun

e J

uly

Aug

ust

Sep

t O

ct N

ov D

ec

Kera

la (A

lapp

uzha

/ Al

lepp

ey)

(W

ith H

usk)

2010

5800

5800

5350

5400

5400

5400

5700

5900

5900

6000

6000

7500

2011

9000

9000

8800

9800

9000

1030

080

0080

0070

0070

0080

0080

0020

1278

0075

0075

0076

0074

0073

0072

0070

0070

0068

0068

0072

0020

1375

0075

0074

0074

0074

0076

0076

0078

0083

0086

0093

0093

0020

1498

0010

000

1000

010

400

1260

012

800

1300

014

000

1480

015

200

1500

014

200

2015

1420

014

000

1420

014

400

1400

014

000

1340

012

500

1340

013

200

1300

012

800

2016

1230

012

300

1170

011

900

1140

011

000

1040

010

800

1100

011

000

1100

011

500

2017

1230

012

600

1230

012

300

1230

012

300

1250

012

800

1320

0Ke

rala

(Ala

ppuz

ha/

Alle

ppey

) (W

ithou

t Hus

k)

2010

6000

6000

5550

5600

5600

5600

5900

6100

6000

6500

6100

7600

2011

9100

9100

9000

1000

010

200

1050

010

000

1000

092

0082

0082

0082

0020

1280

0077

0077

0078

0076

0075

0074

0072

0072

0070

0070

0074

0020

1377

0077

0076

0076

0076

0078

0078

0080

0085

0088

0095

0095

0020

1410

000

1020

010

200

1060

012

800

1300

013

200

1420

015

000

1540

015

200

1440

020

1514

400

1420

014

400

1460

014

200

1420

013

600

1270

013

600

1340

013

200

1300

020

1612

500

1250

011

900

1210

011

600

1120

010

600

1100

011

200

1120

011

200

1170

020

1712

500

1280

012

500

1250

012

500

1250

012

700

1300

013

400

Kera

la (K

ozhi

kode

) (M

ediu

m)

2010

4000

4000

4300

4400

4200

4300

4200

4250

4700

5300

5400

5900

2011

6700

7500

7250

7600

7700

7600

7500

7150

6700

6400

6500

6500

2012

6500

6200

6400

6200

5500

5500

5000

4900

4800

4500

4500

5000

2013

6200

6000

6200

6600

6300

6500

6700

6800

6800

7500

1000

093

0020

1410

400

1100

011

400

1400

013

500

1240

012

800

1300

012

500

1220

098

0012

000

2015

1240

011

600

1270

012

800

1060

010

000

1040

095

0090

0085

0087

0080

0020

1673

0075

0068

0072

0067

0066

0062

0073

0074

0075

0082

0098

0020

1711

000

1080

012

500

1200

012

000

1155

013

000

1400

015

700

Wes

t Ben

gal

(Kol

kata

)

(With

She

ll)

2010

-

-

-

-

-

-

-

-

-

-

-

-

2011

-

-

-

-

1300

013

000

1300

013

000

1300

013

000

1300

013

000

2012

1300

015

000

1500

015

000

1500

015

000

1500

015

000

1500

018

000

1600

016

000

2013

1600

016

000

1600

014

000

1600

016

000

1600

016

000

1600

017

000

1700

017

000

2014

1700

017

000

1700

017

000

1700

017

000

1700

017

000

1700

017

000

1700

017

000

2015

1700

017

000

1700

017

000

1700

017

000

1700

017

000

1800

019

000

1900

019

000

2016

1900

019

000

1900

019

000

1900

020

000

2000

020

000

2000

020

000

2000

020

000

2017

2000

020

000

2000

020

000

2000

020

000

1900

019

000

1800

0So

urce

: DES

, Min

istry

of A

gric

ultu

re a

nd F

arm

ers W

elfa

re

(C

oncl

uded

)

2018 SEASON48

Price Policy for

CopraAn

nex

Tabl

e 4.

1 : E

xpor

t of C

ocon

ut O

ils a

nd C

ocon

ut P

rodu

cts

from

Indi

a (Q

ty in

tonn

es, V

alue

in `

Lak

h)SI

. N

o.Ite

m20

10-2

011

2011

-201

220

12-2

013

2013

-201

420

14-2

015

2015

-201

620

16-2

017

Qty

Valu

eQ

tyVa

lue

Qty

Valu

eQ

tyVa

lue

Qty

Valu

eQ

tyVa

lue

Qty

Valu

e1

Coco

nuts

(fre

sh)

1590

128

6724

345

5163

2990

758

0930

397

7235

2902

089

2837

467

1127

951

803

1458

52

Coco

nuts

(drie

d)51

6425

1113

743

7936

2155

910

361

2225

016

196

1697

421

249

2201

020

754

2638

121

902

3De

sicca

ted

coco

nut

4144

1009

5173

2309

3004

1465

5166

3869

3244

2666

3443

3151

1490

714

771

4O

ther

coc

onut

s ex

clud

ing

(fres

h/dr

ied)

1204

343

3414

052

6149

1463

644

1511

103

4148

1153

355

8715

447

7111

3320

211

376

5(a

) Coc

onut

oil

(cru

de)

6940

330

297

108

161

3166

2851

7518

016

447

1580

3

(b) C

ocon

ut o

il (r

efine

d)42

7339

6961

9283

9067

2282

1966

7485

1071

8914

606

6731

1381

617

089

2229

8

6O

ther

resid

ues o

f co

conu

t or C

opra

1331

567

332

554

6310

549

171

418

8514

134

197

64

7Fr

esh

Endo

carp

--

--

--

1162

431

3681

1064

2048

706

5416

1354

8Dr

ied

Endo

carp

--

--

--

150

4513

313

713

212

071

253

99

Oth

er E

ndoc

arp

--

--

--

637

172

489

237

390

188

1258

946

10O

ilcak

e (d

efat

-te

d/ex

pelle

rs)

31

143

418

7837

1628

70

034

8

11Co

conu

t she

ll (R

aw)

543

194

785

268

1046

271

613

218

575

334

330

220

183

166

12Ac

tivat

ed C

arbo

n36

481

2257

751

437

4522

567

720

5612

368

435

6078

664

562

6645

871

673

7475

685

805

8150

713

Copr

a18

433

9927

1761

911

381

1728

287

1611

957

7244

7284

8093

4389

3648

5413

214

241

14O

ther

s31

1571

7366

2660

3159

8326

1968

47To

tal

5121

694

348

1022

5311

5137

1354

8513

8580

2064

06Co

ir pr

oduc

ts

3210

1680

707

4108

5410

5263

4295

0111

1603

5370

4014

7604

6266

6616

3034

7520

2019

0143

9570

4522

8165

Sour

ce: D

GCIS

, Coc

onut

Dev

elop

men

t Boa

rd a

nd C

OIR

Boa

rd

2018 SEASON49

Price Policy for

CopraAn

nex

Tabl

e 4.

2 : I

mpo

rt o

f Coc

onut

Oils

and

Coc

onut

Pro

duct

s to

Indi

a (Q

ty in

tonn

es, V

alue

in `

Lak

h)

SI.

No.

Item

2010

-201

120

11-2

012

2012

-201

320

13-2

014

2014

-201

520

15-2

016

2016

-201

7

Qty

Valu

eQ

tyVa

lue

Qty

Valu

eQ

tyVa

lue

Qty

Valu

eQ

tyVa

lue

Qty

Valu

e

1Co

conu

t (Fr

esh)

--

--

94

--

--

--

--

2O

ther

coc

onut

ex

clud

ing

(fres

h/dr

ied)

104

419

1427

311

24

--

--

--

3De

sicca

ted

Coco

-nu

t0

014

1919

1413

1224

637

166

67-

-

4O

ther

End

ocar

p-

--

--

-30

10-

--

--

-

(a) C

ocon

ut o

il (c

rude

)0

00

00

00

062

0549

4324

1518

90-

-

(b) C

ocon

ut o

il (R

efine

d)10

6356

430

1427

2310

0264

016

4687

334

6830

7627

6022

579

37

5O

ther

resid

ues o

f co

conu

t or c

opra

--

454

335

--

337

-28

--

Activ

ated

Car

bon

7632

8439

1142

213

444

9061

1345

297

6716

060

1246

819

050

1270

020

006

1295

122

709

6O

ilcak

e (S

olve

nt

and

Expe

ller

varie

ty)

3550

830

6939

622

4741

3789

449

0025

798

3725

8829

013

619

1577

2724

270

1652

9526

529

7O

ther

s64

108

160

2429

4303

4736

267

Tota

l12

141

2105

219

185

2311

245

369

5325

549

542

Sour

ce :

DGCI

S, C

ocon

ut D

evel

opm

ent B

oard

and

CO

IR B

oard

2018 SEASON50

Price Policy for

Copra

Annex Table 5.1: Month-wise and State-wise Average Daily Wage Rates for Agricultural Labour (Man)

(`/Day)

Year/Month Andhra Pradesh Karnataka Kerala Tamil Nadu All-India

2014

January 229 237 580 355 275

February 226 240 629 362 278

March 222 243 594 356 274

April 222 240 594 361 275

May 225 242 594 364 277

June 217 241 594 362 273

July 230 241 599 372 281

August 226 241 599 371 279

September 239 242 586 417 294

October 241 242 586 412 293

November 247 244 597 421 299

December 236 252 604 417 297

2015

January 246 254 643 430 306

February 250 252 643 440 309

March 245 253 642 429 305

April 245 253 652 403 300

May 235 260 652 405 299

June 239 260 664 399 300

July 229 269 664 393 297

August 241 277 653 404 307

September 241 278 656 394 305

October 240 279 656 392 305

November 276 285 657 382 319

December 278 286 657 383 320

(Continued)

2018 SEASON51

Price Policy for

Copra

Annex Table 5.1: Month-wise and State-wise Average Daily Wage Rates for Agricultural Labour (Man)

(`/Day)

Year/Month Andhra Pradesh Karnataka Kerala Tamil Nadu All-India

2016

January 276 285 664 381 319

February 254 281 666 383 310

March 250 280 670 406 313

April 272 278 670 406 320

May 256 283 665 400 314

June 254 288 665 396 315

July 257 295 665 408 321

August 262 293 665 411 323

September 263 293 665 412 323

October 263 290 665 409 321

November 271 297 665 406 327

December 284 298 665 406 332

2017

January 286 303 675 412 336

February 286 302 675 413 336

March 290 300 675 413 337

April 291 300 682 413 337

May 288 301 687 413 337

June 269 300 687 410 329Note: Daily Wage rate - Average of five operations i.e. Ploughing, Sowing, Weeding, Transplanting and Harvesting.Source: Labour Bureau, Ministry of Labour, Govt. of India

2018 SEASON52

Price Policy for

CopraAnnex Table 5.2: Farm Inputs - Wholesale Price Index (Base 2011-12=100)

Year/Month High Speed Diesel (HSD)

Fertilizers and nitrogen compounds

Electricity Agricultural tractors

Lube Oils

Cattle Feed

Fodder Pesticides and other

agrochemical products

Annual Average (July - June)2012-13 113 115 101 105 111 131 123 1082013-14 130 117 104 105 115 143 143 1142014-15 105 120 106 108 120 141 148 1212015-16 68 121 104 112 121 152 168 1212012April 112 108 97 104 106 107 108 106May 112 110 101 104 106 110 105 106June 110 112 103 104 110 113 102 106July 109 114 102 104 110 118 107 107August 111 114 99 104 110 123 111 108September 114 115 97 104 110 129 119 109October 108 115 101 105 110 131 123 108November 108 115 102 105 110 132 125 109December 108 115 101 105 110 131 125 1082013January 112 115 105 105 110 130 122 108February 118 115 101 105 110 131 127 107March 118 116 98 105 110 134 129 108April 115 115 101 106 112 138 126 109May 112 115 101 104 112 140 125 105June 117 116 102 104 112 140 132 107July 123 117 102 104 112 140 136 110August 126 117 103 104 115 140 137 111September 133 117 105 104 115 142 138 112October 130 116 103 105 115 143 139 113November 130 117 103 105 115 143 140 113December 133 117 106 104 115 142 142 1142014January 132 117 106 104 115 141 144 113February 132 117 106 104 115 141 150 111March 133 118 106 105 115 142 156 115April 130 117 106 106 117 144 148 119May 131 118 103 107 117 148 139 119June 129 119 102 106 117 147 142 121July 132 119 103 107 117 146 142 120August 131 119 106 107 117 144 146 118September 130 119 105 107 120 142 154 124October 126 119 104 107 120 139 155 122November 113 119 107 107 120 137 156 122December 104 120 108 108 120 137 157 119

(Continued)

2018 SEASON53

Price Policy for

CopraAnnex Table 5.2: Farm Inputs - Wholesale Price Index (Base 2011-12=100)

Year/Month High Speed Diesel (HSD)

Fertilizers and nitrogen compounds

Electricity Agricultural tractors

Lube Oils

Cattle Feed

Fodder Pesticides and other

agrochemical products

2015January 88 119 109 108 120 138 156 123February 79 120 108 108 120 139 151 123March 87 120 108 108 120 139 143 120April 83 121 108 111 121 141 140 122May 92 121 106 111 121 144 138 123June 93 121 106 111 121 145 143 123July 87 121 107 111 121 145 151 125August 73 122 105 111 121 147 166 123September 71 122 106 111 121 149 167 124October 74 122 103 112 121 151 169 124November 74 121 105 112 121 150 173 123December 72 121 105 112 121 150 176 1222016January 57 122 106 112 121 151 173 123February 50 122 104 112 121 154 170 122March 55 121 103 112 121 154 172 120April 59 121 101 114 121 155 167 117May 67 121 102 113 121 156 161 119June 75 121 103 113 121 159 170 118July 75 120 103 113 121 161 170 117August 67 119 103 114 115 162 163 116September 71 118 104 114 115 161 163 117October 73 118 104 114 115 159 165 115November 77 118 106 114 115 159 164 115December 77 117 106 114 115 158 164 1162017January 83 117 108 114 115 157 163 118February 85 117 107 114 115 158 166 117March 85 117 103 113 115 155 160 117April 82 117 103 114 115 156 160 117May 81 117 103 114 114 156 157 117June 80 117 102 114 113 156 157 118July 79 117 102 114 113 156 162 118% change of May to July, 2017 over May to July,2016

11.2 -3.1 -0.3 0.7 -6.1 -1.6 -4.9 -0.1

Source : Office of the Economic Adviser, Ministry of Commerce and Industry

2018 SEASON54

Price Policy for

Copra Annex Table 5.3: Copra : Break-up of Cost of Cultivation

(`/ha)

Cost Items Kerala Tamil Nadu

2015-16 2014-15 2015-16 2014-15

Operational Cost 105386.00 92251.70 65420.62 67288.11

Human Labour

Casual 54316.64 49498.23 19697.78 21302.38

Attached 0.00 0.00 985.66 1341.97

Family 20422.45 16530.56 21825.19 23371.36

Total 74739.09 66028.79 42508.63 46015.71

Bullock Labour

Hired 0.00 0.00 0.00 0.00

Owned 0.00 0.00 0.00 0.00

Total 0.00 0.00 0.00 0.00

Machine Labour

Hired 159.73 261.35 1562.71 1105.05

Owned 6.71 3.00 269.44 170.08

Total 166.44 264.35 1832.15 1275.13

Seed 0.00 0.00 0.00 0.00

Fertilisers and Manure

Fertilisers 4791.88 4510.15 6569.54 7028.89

Manure 18493.88 14968.40 3242.56 3282.34

Total 23285.76 19478.55 9812.10 10311.23

Other Inputs

Insecticides 4.24 6.17 213.36 96.92

Irrigation charges 2192.62 2019.65 8489.00 7005.78

Interest on working capital 4997.85 4454.19 2565.38 2583.34

Miscellaneous 0.00 0.00 0.00 0.00

Fixed Cost 33822.10 42570.80 50054.58 35926.89

Rental value of owned land 30014.38 39518.84 42059.66 26571.94

Rent paid for leased-in land 0.00 0.00 0.00 0.00

Land revenue,cesses & taxes 132.10 131.85 13.89 10.44

Depreciation on implements & Farm buildings

1118.66 798.77 355.13 344.58

Interest on fixed capital 2556.96 2121.34 7625.90 8999.93

Total Cost 139208.10 134822.50 115475.20 103215.00

Source: DES, Ministry of Agriculture and Farmers Welfare