Coconut: A Perplexing Nut

It seems in India, according to The Hindu in its article on coconut oil (1) , the coconut oil industry has "lost glory." Coconut oil producers are not sufficiently protected by the market.
There has been generally a drop in products that contain fatty acids, thus affecting this product's rate of import. Import tariff's on palm oil and polyolefin has decreased, which means that the import of these competing oils take business away from coconut oil producers. Prices of the oil fluctuate on a daily basis. In response, coconut oil has been mixed with lower quality ingredients when coconut oil prices are high and falsely sold to consumers.


In Vietnam, the coconut industry also does not sufficiently protect the producers (2). The article about Vietnam, however, does not focus on the problems associated with the production of coconut oil but of those associated with any processing of the coconut. Producers experience competition from two sides because of tremendous demand. The growers sell the fruit at high prices because of the high demand to ship it to China, Thailand, and Cambodia.

What can we say about all this? Firstly, I adore coconut milk. My Brazilian friend the other day took coconut milk, condensed milk, and...I added some water to this sinful drink...and it was one of the best things I'd ever had. The point: Coconut is so damn good I see why it causes so many problems.

A tad more seriously, from the reading it seems that the coconut market in India has affected it internally (as Indians struggle with the rising price of coconut oil) and with the exportation of coconut oil (as the demand for coconut oil has fallen). The Vietnan coconut industry, on the other hand, is flourishing on an international front as the demand to import its coconuts is on the rise but is suffering internally as producers find themselves competing with international buyers for raw coconut product.

Does this mean that perhaps India should stop processing coconuts in order to extract coconut oil because it seems the demand is higher for copra, the raw coconut meat, in the international market? Does this mean that Vietnam should allow the national coconut prices to be solely regulated by the international market's demand? Neither solution takes into consideration the producers, who are suffering, for different reasons but in similar ways, by the demands for coconut and its products in the international market.

I wonder if the demands by the international market, increasingly a more healthy market, will continue to favor the raw, unprocessed coconut rather than its less healthy byproducts such as coconut oil--unfavorable for India.

Ideas, suggestions,...would be highly appreciated. The problem with the coconut in India and Vietnam can be compared to many crops whose prices become high in the local market.



References:
1. "Better deal for coconut oil sector demanded." The Hindu 22 Sept 2006: Hindu.com 3 Oct 2006 http://www.hindu.com/2006/09/22/stories/2006092209012100.htm

2. "Coconut price soar, growers get rich, producers starve." VietNamNet 28 Sept 2006: Vietnamnet.vn 3 Oct 2006 http://english.vietnamnet.vn/biz/2006/09/616734/