Packaged tender coconut water set to turn dearer
Packaged coconut water is set to become costlier this summer due to lower coconut production and higher taxes under the goods and services tax (GST) regime. In northern India, which gets its supply of coconuts from the south, the retail price of a 200-ml pack of tender coconut water could rise by 15-20% to Rs 38-40, according to industry executives, making it costlier than soft drinks.
Manufacturers also fear sales could be hit. “Our sales could be impacted as soft drinks retail for around Rs 25 per 200 ml,” said CM Kamaraj, managing director of Pollachi based Sakthi Coco Products. Coconut production in Tamil Nadu and Kerala — the country’s largest coconut-producing states — has dropped due to inadequate rains. “The yield of the nut has gone down due to poor rains. Compared with 400 ml earlier, we are getting 250 ml to 300 ml now,” Kamaraj said.
T Sathish, managing director of Naturel Foods at Palakkad, said: “From around Rs 15-16 per kg, the price of a tender coconut has shot up to Rs 20-25.” Adding to the sector’s woes is GST. Earlier, tender coconut water was taxed at 5%. But now, while GST remains at the same rate for the unbranded packs, it has been fixed at 12% for the branded ones. “Added to that is the GST of 18% for polypropylene (PP) bottles used for packing. Pre-GST, it used to be around 14.5%,’’ said Satish. To tide over the situation, companies are adopting different measures. While some have cut production, others are absorbing the price increase to keep the edge in competition.