27/12/2007 (live.mint.com) - Aban imposed on the import of palm oil through the ports in Kerala two days ago may not have much effect and is also unlikely to help raise consumption of coconut oil in the state, industry sources said.

The director-general of foreign trade (DGFT) had on 24 December ordered the ban, following complaints by the state government, which said the import of palm oil was resulting in lower consumption of coconut oil and thereby a drop in its prices.

But P.V. Alexander, former president of the First Commodities Exchange of India, said the ban does not mean anything for the coconut oil industry. “Palm oil has been coming into the state for long and practically all the refining units are situated outside Kerala, in Mangalore, Karnataka, Chennai and Tamil Nadu. The ban is not applicable to ports at these states,” said Alexander, who deals in coconut oil and is also an oil miller.

According to trade sources, the total consumption of edible oils in Kerala is around 360,000 tonnes and the annual coconut oil production is about 160,000 tonnes. But the government trade promotion body, Coconut Development Board, claims it is 250,000 tonnes. The coconut oil shortfall is substituted mainly by palm oil and sunflower oil. Rice bran oil also has a small share. Most of the hotels and restaurants in Kerala have switched to palm oil whose price now rules around the same as that of coconut oil at Rs50 a kg, said Alexander.

Farooq Ahmed, marketing manager of Parrisons Foods Pvt. Ltd, the Kozhikode-based palm oil refining firm, said the amount of palm oil being imported into Kerala is limited. The bulk of it is in Mangalore and Chennai where there are refineries. Even for his company, import through Mangalore port would be preferable.

“The government will lose revenue from the ports and the port workers will lose their income,” he said. The fall in coconut oil prices in Kerala is the result of higher production of coconuts in neighbouring Tamil Nadu and it has nothing to do with the import of palm oil, he said.

Earlier in October, DGFT had banned import of palm oil through the Kochi port. The ban was stayed by the Kerala high court, only to be lifted after about two weeks.

During the court stay, about 10,000 tonnes of palm oil was unloaded at Beypore port in Kozhikode in north Kerala. The state government had then protested against the import demanding a ban on palm oil imports across Kerala.