Price behaviour of coconut and coconut products in India
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Date
2005
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Department of Agricultural Economics, College of Horticulture,Vellanikkara
Abstract
The coconut-based industry in India revolves around the price behaviour of
coconut oil, which in turn depends on the price and overall availability of other
vegetable oils. It is against this background that the study entitled "Price behaviour of
coconut and coconut products in India" was undertaken with the specific objective to
study the secular trend, seasonality and irregular movements in the price of coconut
and major coconut products in India, and to assess the implications of liberalized
exim policies. The study was conducted during the year 2004-05, using secondary
data.
It was found that an exponential growth model gave the best fit for area and
production of coconut where as a quadratic form turned out to be the best fit for
yield. The analysis showed that the area and production in the long run exhibited an
increasing trend, while the productivity was highly fluctuating .
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There was a clear shift in the export basket of coconut products, with coconut
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oil cake being the major item exported in the sixties, which is now occupied by
coconut oil and coir products. Similarly, copra was the major item of import in the
sixties, which is now occupied by coconut oil.
The price behaviour of coconut and its• products were studied using the
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classical time series analysis. The prices of coconut, copra and coconut oil had a
tendency to increase in the long run. The domestic price of copra and coconut oil was
higher than the international price during theperiod under study, The domestic
markets were well integrated for coconut products under consideration on the one
hand, with the international market on the other hand.
There were marked seasonal variations in the pnces of coconut and its
products, with coconut prices remaining low during the months of peak production
and high when production was low. The peaking and depression were found to have
advanced by one or two months in the post WTO period.
Price cycles of three to four years were observed iri all the three domestic
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markets studied for coconut, copra and coconut oil. It was also interesting to note that
the amplitude of cycle was found to wane in the post WTO period of the study.
There was wide spread irregular movements in the price of coconut and its
products under reference. There were indications than the irregular movements
contributed to higher price fluctuations.
The study of export competitiveness of copra and coconut oil using the
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nominal protection coefficient revealed that both copra and coconut oil are not trade
competitive in tht« international market at the existing price levels.
The policy analysis with regard to edible oil sector in general and the coconut
sector in particular showed that the general policy. regimes and instruments of
Government of India were distinctly different with regard to. the edible oil sector in
general and tliat of coconut oil and palm oil in particular. The import duty structure
was found to be inadequate to regulate the surge of imports of palm oil and its
variants from 1994 to 2003, calling for rationalization of the import duty structure.
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Citation
172466