Nothing tender about coconuts, price hits 30

Customers may have to shell out more for quenching their thirst the natural way this summer as a sharp fall in production due to an extended dry spell last year has send tender coconut prices soaring.

Fresh tender coconuts are being sold for Rs 30 apiece in south India, the chief production region , and are expected to climb up further by April-May when the summer season sets in the northern parts of the country.

Even Rs 50 a nut is not ruled out. Packaged tender coconut water suppliers are worried as raising retail prices beyond a point could result in declining sales and put pressure on their margins. Some are likely to stop production temporarily to cut losses. Farm gate prices have already touched Rs 14 a nut and could go beyond Rs 20 by May which packed tender coconut water suppliers find unviable. “We retail at Rs 30 for 200 ml and if we increase it to Rs 40, it will hit the sales. Absorbing the raw material cost increase will put a severe pressure on our margins. So if prices climb up beyond a point, we will even consider stopping the production temporarily," said Ajay Kumar Jain, managing director of Bangalore-based Jain Agro Food Products, which sell the Coco Jal brand.

Coconut production in general has dwindled by 20-50 per cent in Karnataka, Tamil Nadu and Andhra Pradesh due to a severe drought in the past year. Production loss is lower in Kerala.

Maddur in Karnataka and the Pollachi-Coimbatore region in Tamil Nadu are the primary sourcing centres for tender coconuts in the country. Anu Coco Food Products in Hyderabad has raised the price for a 200-ml packet by Rs 2 to Rs 30.

The company, which also supplies to Dabur India for its Real Active brand tender coconut water, produces 10,000 packets a day. “Right now the supply is okay. If the farm gate prices go up in peak summer, we may absorb it and not change the selling price,” said KT Charyulu, general manager.

Exporters too may not get much relief as the rupee has risen. “We export 50 per cent of our production to several nations including the US and Canada. But we don’t expect more returns this year,” pointed out Anand, partner of Coimbatore-based Pure Tropic, which markets the Tendo brand.

The company is yet to decide whether to go for a rise in the price of its product in the local market.