Malaysian palm oil floods Kerala markets after high court lifts ban

Malaysian palm oil floods Kerala markets after high court lifts ban

Kochi: The Kerala high court’s stay on the Union government directive to ban import of palm oil through Kochi port last week has opened the floodgates and there seems to be no end to the flow of palm oil into the southern state.

The government move was to help the coconut oil industry in Kerala that has not been in the best of health, following widespread use of palm oil as edible oil. The court lifted the ban on 6 November.

Since then, around 8,000 tonnes of palm oil has arrived in the state from Malaysia and another 8,000 tonnes is expected to arrive this weekend.

On 17 October, the director-general of foreign trade imposed a ban on import of palm oil through Kochi port, while allowing shipments only through Mumbai and Kolkata ports. The government trade promotion body, Coconut Development Board, had been pleading with the government to stall imports of palm oil through Kochi port in the wake of falling coconut oil price in Kerala.

The price of coconut oil is now around Rs48 a kg, down from Rs70 a few years ago.

Cheap palm oil has been contributing to low domestic consumption of coconut oil, leading to fall in its demand and the resultant price crash, says M.J. Kuriakose, an executive with the Cochin Oil Merchants Association.

 However, the ban was challenged in the Kerala high court by Kozhikode-based Parrisons Foods Pvt. Ltd, which is engaged in palm oil refining and distribution.

Parrisons Foods had, in fact, lined up a few shipments from Malaysia. After hearing the petitioners and the government, the court stayed the ban.

The petitioner, represented by N.K. Mohammed Ali, managing director of Parrisons Foods, had said that the fall in coconut oil prices in Kerala was the result of increased production of coconuts in neighbouring Tamil Nadu and had nothing to do with the import of palm oil.

Kerala’s total annual coconut oil production is estimated to be around 160,000 tonnes and the demand for edible oils in the state is believed to be more than 360,000 tonnes. Higher coconut production in Tamil Nadu and Karnataka and scarcity of copra (dry coconuts without shell used for oil extraction), eventually led to the closure of a large number of oil mills in Kerala over the last few years.

The closures made edible oils such as palm oil more popular among consumers, says Kuriakose. Palm oil had begun its entry into the Kerala market in the mid-1980s, according to Kuriakose.

Traditionally, palm oil has been cheaper than coconut oil. About three years ago, coconut oil prices ruled around Rs65 a kg and palm oil at Rs40.

However, over the past two years, the price difference has narrowed and now palm oil is costlier than coconut oil. It sells at Rs53 a kg, against coconut oil’s price of Rs48.

N. Ananthan, former secretary of the Cochin Oil Merchants Association, says the availability of cheap palm oil over the last two decades had helped change the taste of a large section of the people in the state. This, along with the adulteration in coconut oil in recent times, has made North Indian buyers shift to Tamil Nadu to source coconut oil.

The Coconut Development Board is aware of the adulteration problem and has been taking steps to check the ­practice.

According to port authorities, a Malaysian ship Earth Song downloaded 2,000 tonnes of palm oil at the Kochi port on Friday. Another ship with 8,000 tonnes of palm oil is expected to arrive in Kochi this weekend. The state committee of the ruling Left Democratic Front (LDF), which met in the capital Thiruvananthapuram on Sunday, says the commerce ministry must file an appeal against the court verdict.

Vaikom Vishwan, Communist Party of India (Marxist) leader and convener of the LDF, says the government has to initiate steps to procure copra from the farmers and make efforts for manufacture and marketing of coconut oil and coconut-based products.