Up, Down the Merry-go-round This Year for the Com­modi­ties Mar­ket

Pep­per and co­conut oil prices touched new peaks while rub­ber plunged the depths

The Economic Times - - Economy - PK KR­ISH­NAKU­MAR

The past one year has been un­prece­dented for sev­eral com­modi­ties. The pep­per and co­conut oil prices touched new peaks while rub­ber plunged the depths. Seafood and cashew ex­ports have touched all-time highs. But ex­cept seafood in­dus­try, the oth­ers haven’t gained much from this. The rise in pep­per and co­conut oil prices was trig­gered by a sharp pro­duc­tion loss. High raw nut im­port prices took the sheen off the cashew ex­ports. As for nat­u­ral rub­ber, the over sup­ply and slug­gish de­mand in the in­ter­na­tional mar­ket was re­flected on the In­dian rub­ber scene leading to a plunge in prices de­spite short­fall in pro­duc­tion. Pep­per prices af­ter hit­ting .` 500 per kg grad­u­ally rose past .` 700 mark in about two months and are hov­er­ing in the range of .` 730 to 740 per kg now. The rea­son be­ing mas­sive fall in pro­duc­tion from 50,000 tonne to 35,000 tonne due to ir­reg­u­lar weather. But both ex­porters and grow­ers were caught un­awares by the spi­ralling prices. Ex­pect­ing higher prices, it seems the grow­ers had with­held what­ever stocks they had. There was a se­vere short­age in the mar­ket in the past few weeks. “Now we are see­ing some ar­rivals trick­ling in from the high ranges in Ker­ala. Prob­a­bly, the grow­ers feel that prices can’t get bet­ter than this,” said Jo­jan Malayil, CEO of Bafna En­ter­prises, a ma-

Seafood ex­ports are set to touch a whop­ping

30,000 cr, al­most 60% rise over pre­vi­ous year

jor ex­porter. In the case of co­conut, though Ker­ala re­ported a slight rise in pro­duc­tion, Tamil Nadu and Kar­nataka wit­nessed 30 to 40 % fall in out­put. Both co­conut and co­conut oil prices more than dou­bled. Co­conut oil prices zoomed to a high of Rs 158 per kg. “Those that took care of the co­conut trees well ben­e­fit­ted, par­tic­u­larly in Ker­ala. The pro­duc- tion next year too may not be nor­mal but the fall will not be as acute as in this year,” said TK Jose, Co­conut De­vel­op­ment Board chair­man. Seafood ex­ports are all set to touch a whop­ping .` 30,000 crore, al­most 60% rise over pre­vi­ous year pig­gy­back­ing on frozen shrimps. The dis­ease in South East Asian farms turned out to be a boon for In­dia. The shrimp prices touched $18 per kg, a new high. In the re­cent weeks, the prices have fallen as over­seas farms be­gan to re­coup out­put. Cashew ex­ports reached .` 4,976 crore in 2013-14 with in­creased de­mand from the tra­di­tional mar­kets. But, the high prices of im­ported raw nuts limited the gains of the ex­porters as the cashew ker­nel prices did not match the im­ported nut prices. Rub­ber prices sank to a four-year­low of .` 138 in In­dia with in­ter­na­tional prices un­der pres­sure from over sup­ply. With prices fall­ing be­low cost of pro­duc­tion, the grow­ers were hit hard. Of late, lean sea­son and some buy­ing by the tyre in­dus­try have lifted the prices to .` 150 per kg, around .` 27 more than the in­ter­na­tional prices.

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