Severe Shortage of Copra Hits Kerala's Coconut Oil Mills

Small-scale coconut oil mills in Kerala are struggling due to record-high copra and coconut oil prices driven by severe shortages. Wholesale coconut oil prices in Kerala have jumped sharply, reaching USD 3,13 per kg, while copra prices surged to USD 2,09 per kg, approaching the record of about USD 2,40 per kg from 2017-18. The drastic decline in copra supply, down 40-50% in Kerala and Tamil Nadu, is forcing many smaller milling units to cease operations due to lack of raw material.

Coconut Farmers Not Benefiting Despite High Retail Prices

According to Thalath Mahmood, president of the Cochin Oil Merchants Association (COMA), despite retail coconut oil prices climbing to USD 3,60 per kg, farmers are seeing little benefit. In fact, the raw coconut price has dropped to USD 0,78 per kg, down significantly from USD 0,84 per kg six months ago. High prices have also made buyers from northern Indian markets reluctant to purchase coconut oil, further depressing overall demand.

Global Supply Constraints and Speculative Trading

Industry stakeholders have raised concerns that some traders in Tamil Nadu and Karnataka might be holding back stocks intentionally, waiting for prices to rise further. COMA urged government intervention to investigate these allegations.

Globally, coconut production has suffered due to climate change and drought conditions in key producing nations. At the same time, increased demand from Europe and China—especially for high-value coconut-based products—is adding further strain on supplies.

Key Factors Influencing Copra Prices

Some relief might come with the upcoming harvest season. However, until new supply arrives in sufficient quantities, price volatility and instability in coconut and copra markets are expected to continue, reflecting patterns seen in previous price surges of 2021, 2018, and 2014.