Banana Chips Industry Faces Crunch as Banana Prices Fall and Coconut Oil Costs Surge Ahead of Onam
As the Onam festival approaches, two key ingredients used in Kerala’s iconic banana chips—Nendran bananas and coconut oil—are showing opposite market trends, creating challenges for the chips industry.
According to L.A. Joshy, a Nendran banana trader from Ernakulam, wholesale banana prices have dropped sharply to ₹35 per kg from ₹60 just a month ago. He attributes this price drop to a surge in production from Tamil Nadu, where farmers have expanded cultivation and increased output to meet Kerala’s festive demand.
“Normally, lower banana prices would encourage chips makers to buy in bulk ahead of Onam. But this year, the rising cost of coconut oil is offsetting that advantage,” Joshy said. As a result, sales of both bananas and coconut oil are seeing a slowdown.
Even Tea Shops Feel the Pinch
It’s not just chips manufacturers feeling the impact. Tea stalls that sell pazham pori—a popular banana fritter—are also struggling. The rising cost of coconut oil has forced many vendors to either reduce their banana purchases or increase the price of snacks. However, with customers reluctant to pay more, vendors face tough choices.
Some tea shops have already raised prices to cope with the higher oil costs, but this has affected sales, Joshy added. Also Read | Tea farming and its economics – The impact of global demand on local growers
Tamil Nadu’s Growing Role in Banana Supply
ICAR Emeritus Professor P. Indiradevi noted that Tamil Nadu and Karnataka have significantly ramped up Nendran banana cultivation in recent years, especially to serve the Onam market in Kerala. Tamil Nadu is India’s fourth-largest banana producer, with 1.02 lakh hectares under cultivation and nearly 39.39 lakh tonnes harvested in 2021–22.
Nendran bananas, mainly grown in Coimbatore, Erode, Trichy, and Kanyakumari, offer better profits compared to traditional varieties like Yelakki, Poovan, and Rasthali. However, the production cost is higher—about ₹15 per kg—nearly twice that of Kerala-grown bananas.
Coconut Oil Prices Show Early Signs of Easing
There’s some relief on the horizon. Coconut oil and copra prices have started to decline slightly, dropping ₹6 and ₹10 per kg, respectively, over the past week.
Thalath Mahmood, President of the Cochin Oil Merchants Association, said the price drop is due to fresh copra harvests increasing supply. He expects coconut oil prices to fall below ₹350 per kg during Onam. Currently, in the Kochi market, coconut oil is priced at ₹382 per kg and copra at ₹241 per kg.
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