SEA urges govt to allow import of copra, coconut oil

The Solvent Extractors’ Association of India (SEA) has urged the government to allow imports of copra and coconut oil for an interim period to manage the current demand crisis and to retain consumer attractiveness of coconut oil.

In a memorandum submitted to various ministries in the government, Sanjeev Asthana, SEA President, said this measure is not likely to impact farmers in any way adversely, rather this will stabilise prices and will be helpful for farmers in the long-term.

Stating that the coconut production has been witnessing stress over the last two years, he said the demand has been sharply increasing. Amidst this, the severe summer in March to May coupled with pest attacks impacted the tree health and supplies this year, setting the entire ecosystem in disarray. Farmers are reporting up to 40 per cent drop in coconut yields. Prices of coconut oil have gone up three times in the last 12 months itself. At the wholesale level, prices of the coconut oil have crossed ₹400 a kg, which was close to ₹130 a kg a year back.

Though there may be price realisation for farmers in the short-term, the current situation poses huge risk of demand shrinkage if the consumers move out of the coconut oil due to high prices. This demand for coconut oil may shift permanently.

“Once consumers move out of a particular oil, it is known to be difficult to get the demand back and this has been witnessed in the past in other indigenous oils like ground nut oil. This could lead to farmer distress due to lack of demand in future and shrinking of coconut area,” he said, adding, the movement of consumers from coconut oil to other alternative oil is likely to adversely impact prices of other edible oils in the market as well.

“The country may be witnessing the unfolding of another episode where an indigenous oil is giving way to an imported one. The consumers are likely to move to imported oils which are close substitutes, which may lead to import dependency in long term,” Asthana said.

Kerala, which is a prime consumer market, is showing signs of turning away. With prices soaring, households are rapidly shifting to alternate oils such as palm and sunflower. “Adulteration is becoming rampant now in the sector because of higher prices and importantly the trust in coconut oil is starting to erode. The current situation is impacting all the stakeholder in this sector adversely,” he said.

Urging the government to take urgent actions to address this situation by allowing imports of copra and coconut oil for interim period, he said: “Since coconut is a long gestation period crop, we request the government to allow the short-term imports of coconut oil and copra to manage the price volatility in this current situation.” This concession for import of coconut oil and copra can be considered for an interim period of 6-12 months only with the sole objective to manage the current demand crisis and to retain consumer attractiveness of coconut oil.

While the imported oil along with duties will still be at the same price as the domestic prices of the oil, the availability of oil will ease out the supply stress and consequently prices in the near term. He said the government may impose safeguard conditions like Tariff Rate Quota (TRQ) and import by legitimate manufacturers only, if needed. This measure is not likely to impact farmers in any way adversely; rather, this will stabilise prices and will be helpful for farmers in the long-term, he added.

Published on July 11, 2025