NATIONALMULTICOMMODITY EXCHANGEOFINDIALIMITED

ReportonCopra

4thFloorH.K.House, B/hJivabhaiChambers,AshramRoad, Ahmedabad,Gujarat380009INDIA Phone:917940086039Fax:917940086040 Email:contact@nmce.comURL:www.nmce.com

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TableofContents
Introduction ......................................................................................................................... 3 MajorGrowingAreas MajorGrowingAreas......................................................................................................... 3 TypesofCoconut ................................................................................................................ 4 CharacteristicsofTallvarieties ......................................................................................... 5 CharacteristicsofDwarfvarieties CharacteristicsofDwarfvarieties..................................................................................... 5 Harvesting Harvesting............................................................................................................................ 5 CoconutUses CoconutUses....................................................................................................................... 6 Copra..................................................................................................................................... 7 Copra CoconutCake....................................................................................................................... 7 CoconutCake CoconutOil CoconutOil.......................................................................................................................... 7 DemandSupplysituationinIndia ................................................................................... 8 CoconutProductionandProductivityinIndia CoconutProductionandProductivityinIndia.............................................................. 8 ConsumptionPatternofCoconut ConsumptionPatternofCoconut................................................................................... 11 ImportExportofCoconut ImportExportofCoconut................................................................................................ 12 StrengthofIndianCoconutIndustry StrengthofIndianCoconutIndustry............................................................................. 13 DomesticPricesofCoconutOilandCopra................................................................... 14 DomesticPricesofCoconutOilandCopra

Copra Introduction T he Coconut palm is one of the most useful plants in the world. It is grown in more than 80 countries of the world. Indonesia and the Philippines are the first and the second largest coconut producing country in the world. India is the third largest coconut producing country having an area of about 1.78 million hectares under the crop. Annual production is about7562 million nutswith an average of 5295 nutsperhectare. S outh East Asia is regarded as the origin of Coconut. It is mainly cultivated in Philippines, Indonesia, India, Sri Lanka, Thailand, Malaysia,Fizi, Samoa,SolomonIslands e tc. MajorGrowingAreas T he major coconut growing states in India are Kerala, Tamilnadu, Karnataka, A.P, West Bengal, Maharashtra, Orissa, Assam, Goa, Daman and Diu, Laksh w adeep, Gujarat. Kerala tops in production accounting39percentoftotalproductioninthecountry.

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Statewise Coconut Production in 2006-07

West Bengal Andhra 2% Pradesh 8% Karnataka 10%

Others 7%

Kerala 39%

Tamil Nadu 34%

(Source:MinistryofAgriculture,GovernmentofIndia) Coconut planting can be done JuneJuly in upland areas and October Novemberinlowlyingandheavyrainfallareas. TypesofCoconut There are mainly two distinct groups of coconut i.e. tall and the dwarf, (semitall also exists in between). VHC3 is the recently developed hybrid coconut in variety. Among the plantation and spice crops, India is the first country to exploit hybrid vigor in coconut. Twelve hybrids involving tall and dwarf parents and 4 varieties have beenreleasedforcommercialcultivation.

Copra CharacteristicsofTallvarieties 1.Slowgrowingandlatebearing(6to10yearsafterplanting) 2.Highly crosspollinated (because male and female phases do not overlap as male flowers mature and release pollen earlier than the femaleflowerscomeinreceptivestage) 3.Comparativelyhardytype,andlivesuptoaripeageof80to120years. 4.Itscopra,oilandfiberareofgoodquality. 5.Nutsmaturewithinaperiodof12monthsafterpollination. CharacteristicsofDwarfvarieties 1. They are fast growing and bear early i.e. takes 4 to 5 years (hybrids begintobearfrom3rdyear) 2. They are selfpollinated (due to overlapping of male and female phases). 3. These are less hardy and require better soil and congenial climatic conditionsforhigheryieldpotential. 4. Thecolourofthenutsvariesi.e.yellow,red,greenandorange. Harvesting It is done by cutting whole bunch of nuts by lowering down with the helpofcoirropetiedin the bunch,butsometimes individualnutmay be harvested. Mainly harvesting of coconuts depends on the use of its nuts,forexample i) If coconut water is required, the nuts of 56 months of age are harvested. ii)Ifcopraisneeded(forculinarypurposes),thenutsof810monthsare harvested. iii) If dry copra is needed for coconut oil extraction and for other purposes,thenfullyripenutsof1012monthsorsoareharvested.

Copra CoconutUses Coconut is a product having multifarious utility. It is noticeable that almost all the parts of freshly grown coconut, eatable coconut or driedareusedinsomeortheothermanner. 1) Coconut water or milk is an excellent natural soft drink for all. It is useful for diabetics and heart patients. It is very useful to people suffering from diarrhea and vomiting. It helps in increasing blood circulationinthekidneys. 2) Oil is extracted from dry copra. Copra contains about 65 to 75 percent oil. Copra is also used in the preparation and decoration of cakes.SweetssuchasLadoo,Barfietcarepreparedfromit. 3) The unopened spathe is tapped for toddy. This toddy can be convertedintojaggery,vinegarandsugar. 4) Kernel (wet meat) is mainly used in making curries, chutney, toffee, sweetandforothercookingpurposes. 5) Coir,thefibroushuskofthecoconut,isusedinasurprisinglylarge number of ways. Ropes and yarns, aquarium filters, car seat covers, flower pots, soundproofing, mulch for plant growing, heat insulation, brushes, bristles, mattresses, door mats and matting, rugs,carpets...thelistgoesonandon! 6) Leaves are used for making thatch, jhaps and for other purposes whileleafletsarecollectedandcomposted. 7) Coirpith(or)coirdustisusedasasoilconditioner(manure). 8) Midribsandleafpetiolesareusedformakingbrooms. 9) Inflorescence bunk stalk, stipules and dried spathe are used for warmingwaterorforcookingpurpose. 10) 11) 12) Coconutshellisusedformakingfancyitems,householdsutensils Decoctionobtainedfromrootsisusedasmouthwashandgargle. Coconut oil is one of the most important edible oil for domestic etc.

use. It has also some medicinal value (as it prevents skin diseases likeEczema).

Copra Copra Copra, thedriedkernel isthechief commercial productfromcoconut, which is mainly used for oil extraction. Copra normally has an oil contentvaryingfrom65to72percent. Two types of copra namely milling and edible are made in India. Milling copra is used to extract oil while edible grade of copra is consumed as a dry fruit and used for religious purposes. Milling copraisgenerallymanufacturedbyadoptingsundryingandartificial means. Substantial quantity of milling copra is manufactured using modern hot air driers resulting in the availability of superior quality copra, which is required for the manufacture of best grade coconut oil. A good number of farmers cooperative societies are also involved in the manufacture and marketing of milling copra. Milling copra is available in different grades. Edible copra is made in the form of balls and cups. Different grades of edible copra are available inthemarketaccordingtothesize,colouretc. CoconutCake Coconut cake is the residue left after the extraction of oil from copra which is mainly used as a cattle feed. Coconut cake contains 45 per cent oil which is extracted by solvent extraction process. This oil is generally used for industrial purpose and deoiled cake is used to make mixed cattle feed. There are a few such units in the country especiallyinKerala. CoconutOil Coconut oil is an important cooking medium in Southern parts of the country especially in Kerala State. Besides, the oil has varied industrial applications. It is used in the manufacture of toilet soaps, laundry soaps, surfaceactive agents and detergents, hair tonics,

Copra cosmetics, etc. It is used throughout the country as hairoil as it helps growth of the hair. As massage oil it has a cooling effect on the body. Owing to these qualities coconut oil has a potential market in the country. Since the price of coconut oil in the international market is very much lower than the domestic price, the quality and attractiveness of consumer packs are important factors to compete in the world market. While the demand for coconut oil for cooking purposeiselastic,itsdemandashairoilisinelastic. Coconut oil is becoming more and more popular. Amount of coconut oil exported to the world market during 2004 was 2.06 million tonnes (up from 1.10 million tonnes in 1980), of which the European market absorbed about 44.5 per cent and others such as US and Asia Pacific received23.3percentand24.7percent,respectively. DemandSupplysituationinIndia If we look at the demand and supply situation of Coconut we find that demand is much higher than supply. The domestic consumption is much higher than production so that it could not meet with the domestic demand. In order to meet this higher demand in the domestic market we have to import from the other producing countries. CoconutProductionandProductivityinIndia India is comfortably placed in respect of coconut production. There are two million plus coconut growers. The plant is unique in the sense that it is capable of meeting all the basic needs of food, fibre, fuel, timber and even animal feed. Coconut farming provides employment to nearly ten million people and makes a contribution of nearlyRs70billiontogrossdomesticproduct(GDP).

Copra Area State Kerala Karnataka Andhra Pradesh Orissa Assam Goa Others AllIndia Kerala is the largest producer of coconuts in India producing 6050 Million Nuts followed by Tamilnadu (5430 Million Nuts), Karnataka (1630 Million Nuts), and Andhra Pradesh (1330 Million Nuts) as they have taken 2 n d , 3 r d and 4 t h position respectively. Central Kerala town Kochiisamajortradingcenterforcoconutoilandcopra. Giving focus on productivity, Tamil Nadu comes in 1st position (14495 Nuts/ha.), West Bengal in 2nd position (14307 Nuts/ha.) and Andhra Pradesh in 3 rd position (12629 Nuts/ha.). Kerala being a major coconut producing state its productivity is not so high (6951 Nuts/ha.). Kerala has the largest area under Coconut in India at .87 million hectares covering 45% of the total area under Coconut in India. Karnataka and Tamil Nadu follow closely covering a combined area of another 40%. This is due to the long coastline in these states which issuitableforgrowingcoconutpalmtrees. Million Hectares 0.87 0.40 0.10 44.85 19.07 20.62 5.15 1.03 2.58 1.03 1.03 1.55 3.09 100.00 TamilNadu 0.37 % Production 000 Nuts 6.05 5.43 1.63 1.33 0.36 0.28 0.18 0.15 0.13 0.30 15.84 38.19 34.28 10.29 8.40 2.27 1.77 1.14 0.95 0.82 1.89 100.00 Yield Nuts/ Hectare 6951 14495 4052 12629 14307 5408 8338 8053 4969 @ 8165

Million %

Cumulative % 38.19 72.47 82.77 91.16 93.43 95.20 96.34 97.29 98.11 100.00

WestBengal 0.02 0.05 0.02 0.03 0.06 1.94 Maharashtra 0.02

@SinceArea/Productionislow,yieldrateisnotworkedout.

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Coconut Prodution and Yield Trend 180 Production (in '00 million nuts) 160 140 120 100 80 60 40 20 0 1950-51 1952-53 1954-55 1956-57 1958-59 1960-61 1962-63 1964-65 1966-67 1968-69 1970-71 1972-73 1974-75 1976-77 1978-79 1980-81 1982-83 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05 2006-07 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Yield (nuts per ha)

Production

Yield

(Source:MinistryofAgriculture,GovernmentofIndia) Total productionofcoconutinIndia hasbeenin a rising trend during the past decade. It has risen from levels of 5500 million nuts in the 1980s to 12500 million nuts in the 1990s. In 200506 the total production rose to 14811 million nuts and to 15840 million nuts in 200607. Higher productivity in Tamil Nadu is the main reason for escalation in the production. Good rains have led to bumper crop in Tamil Nadu. These rains reduced the incidence of mites disease. Also,thesystematicandscientificsystemoffarmingandthepresence ofyoungertreesaretheotherpluspointsofTamilNadu. The yield too has risen over the past decade from 5500 nuts per ha in 1980s to around 6800 nuts per ha in 1990s. In 200506 the yield was 7608nutsperhaanditwas8165nutsperhain200607.

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Copra ConsumptionPatternofCoconut Copra is produced in two grades, the edible grade and the milling grade. The edible grade copra is consumed as raw nut (which is used asofferingtogods,gratedtoproducecoprapowderforuseinsweets, chutneys and other dishes) and the milling grade for the extraction of coconutoil. The extracted oil is used for cooking purpose as well as industrial purpose such as hair oils, toilet soaps, splitting into fatty acids for manufacturing chemicals used in shampoos, and in ayurvedic and pharmaceuticalindustries,etc. At present India produces about 10 lakh tonnes of copra annually of which about 2 lakh tonnes is of confectionery or edible grade and 8 lakh tonnes milling grade. The edible copra produced in Malabar region is specially preferred in India and abroad because of its attractivecolourandsweetness. In recent years, however, the use of coconut oil by the industry has been declining because of its high price in the country in the recent past. The toilet soap industry in India uses coconut oil only if its price is below or around Rs. 35 per kg. If it is more, there are substitutesavailablewhicharemuchcheapertousethancoconutoil. AtpresentIndiaproducesabout11614tonnesofcoconutoilannually, of which about 50 per cent is absorbed by the toiletry sector (in hair oils, toilet soaps, chemicals for shampoos, etc), 35 per cent by the households for cooking purposes and 15 per cent is used by confectionery and icecream industry. At one time, the toilet soap industry used to consume 23 per cent of the coconut oil produced in the country but now its consumption has dropped to just 5 per cent . TheuseofcoconutoilashairoilinIndia,however,isrising.

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Copra ImportExportofCoconut Coconut is exported in several forms. The young fruits (nuts) are exported for consumption as a food. The old nuts are exported both as food and planting material. Germinated nuts and young seedlings are exported for planting as well as ornamental purposes. Coconut products exported range from desiccated coconut, coconut cream, milk (santan) and oil. The export conditions vary depending on their form.Thefollowingisasummaryofthevariousconditions.
Coconut Export-Import from India
500000 IMPORT EXPORT

450000

400000

Import & Export figures in MT

350000

300000

250000

200000

150000

100000

50000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

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Copra StrengthofIndianCoconutIndustry One of the leading producers of coconuts in the world producing 15 billionnutsperannum Coconut area distributed in 18 states and three Union Territories underdifferentagroclimaticconditions 3000yearstraditionincoconutcultivation Premiercoirmanufacturingcountryintheworld Producerofbestgrademilling coprainthe worldyieldinghigh grade coconutoilknownforitsaromaandflavour Largenumberoffarmerscooperativesocietiesinprimaryprocessing andmarketing Government agencies such as Kerafed, State Trading Corporation, Kerala State Marketing Federation and Karnataka State Marketing Federation in manufacturing and marketing of branded coconut oil in smallpacks Hundreds of reputed and established private firms in manufacturing and marketing of various coconut products including branded coconutoilinsmallpacks Wide range of coconut products both edible and nonedible available forexport Technical knowhow and trained manpower for the manufacture of variouscoconutbasedproducts Availability of research support by reputed research organizations suchasCSIR,ICARandDRDO Good number of cultivars / varieties having specific nut characteristics

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Copra DomesticPricesofCoconutOilandCopra
NMCE COCONUT OIL AND COPRA SPOT PRICES 8000 7000 6000 Rs per Qntl 5000 4000 3000 2000 1000 0 Apr 30 2004 Aug 8 2003 Apr 21 2005 Apr 7 2006 Nov 25 2002 May 15 Nov 5 2003 Dec 23 2006 Feb 19 2003 Jul 26 2004 Oct 25 2004 Jan 22 2005 Jun 14 2007 Jul 15 2005 Dec 6 2007 Feb 3 2004 Jan 9 2006 Jul 3 2006 Oct 13 2005 Sep 27 2006 Sep 10 2007 Mar 21 2007 Mar 3 2008 Jun 3 2008 Aug 28

COCONUT OIL

COPRA

Coconut oil and Copra prices move in tandem with each other as the twoarerelated.Theyhaveremainedmoreorlesssteadyoverthepast 5years. In India, the average price of coconut oil dropped from Rs 6758 per quintal in 200405 to Rs 5078 quintal in 200506. By March 2007, it fell to Rs 4800 a quintal. Copra prices dropped to Rs 31903225 a quintal. The spot market prices of copra are well below the minimum support price of Rs 3530 a quintal. The central budget 200708 announced cut in customs duty in respect of edible oils. Arrivals of edible oils, particularly palmolein, will be stronger in the domestic market, and this may cause a further drop in coconut oil prices. The coconut oil industry in Kerala is in crisis, after the introduction of valueadded tax (VAT). The demand for copra from the state has dwindled after theadventofVATasithasaddedtothecostofproductionofcopra.

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Copra The Coconut Development Board (CDB) will issue a quality assurance logo for coconut oil in order to curb adulteration. Liquid paraffin and palm kernel oil are widely mixed in coconut oil by unscrupulous traders especially when there is a steep rise in coconut oil prices. Another serious problem is the use of coconut oil as a cooking medium has not spread beyond Kerala and its adjoining areas. The industrial use of coconut oil, which could have sustained its cultivation, has been on the decline, largely because of the availability of relatively cheaper alternatives. The price determining system of coconut and copra is not scientific as it mainly depends on the price of coconut oil alone. The Philippines has discovered that coconut methyl ester (CME) or cocobiodiesel derived from coconut oil is equivalent to, or even better than, conventional diesel fuel. In 2005,about200minibusesweresuccessfullyoperatedonacoconutoil dieselmix. While the World Fuel Charter allows blends of up to 5 per cent of biofuels, studies show that a one per cent mix of cocobiodiesel is enough to significantly reduce GHG emissions. Recent experiments carried out in the US too confirmed this. The higher cetane number (70) of CME than diesel (56) means it burns more completely, resulting in more mileage and lower emissions. Also, CME is safer to handle and store than diesel because it requires a higher temperature to ignite it. It is further pointed out that CME being nearly sulphur free, is much less polluting than diesel. In terms of lubricity also, CMEhasanedgeoverdiesel.

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