Coconut exports from Pollachi, Tamil Nadu's largest coconut-producing region, are showing signs of recovery as geopolitical tensions in West Asia ease and demand from Gulf countries gradually returns, offering much-needed relief to growers and exporters after nearly three months of near-total disruption.

Export Activity Resumes

Fresh enquiries from key Gulf markets have begun reviving overseas trade, which had come to an almost complete standstill during the West Asia conflict. Before the disruption, Pollachi exporters shipped several containers of coconuts daily to Gulf nations through Kochi port — a channel that remained largely suspended for close to three months.

Industry stakeholders expect shipments to gradually return to pre-conflict levels over the coming weeks as enquiries continue to build. However, freight charges remain considerably elevated compared to normal, despite easing from the peak levels recorded during the height of the conflict. The steep shipping costs had earlier caused significant losses, with several consignments reportedly deteriorating before reaching their destinations.

Domestic Market Hit by Oversupply

The prolonged export halt triggered an oversupply in the domestic market, sending wholesale coconut prices sharply lower. Prices have dropped to around ₹40,000 per tonne, compared with approximately ₹65,000 per tonne during the corresponding period last year — a decline of nearly 38%.

A bumper harvest has compounded the pressure, significantly increasing market arrivals. Notably, labour shortages have prevented an even steeper price collapse — a shortage of migrant workers has disrupted harvesting and de-husking operations across the region, slowing the pace at which produce reaches markets. Growers expect the higher production cycle to continue for another two months before the harvesting season tapers off.

Concerns Over Next Season's Crop

Even as the export outlook brightens, concerns are emerging over the 2025-26 crop season. Below-normal rainfall this year and developing drought-like conditions are raising fears of reduced production in the coming season, which could eventually push prices back up.

Water scarcity has already become an immediate challenge for many farmers. Inadequate rainfall has depleted groundwater levels, forcing growers to rely on tanker water to irrigate coconut groves and protect trees from prolonged dry spells. This comes amid an already fragile market recovery, adding a layer of structural risk that the sector will need to navigate carefully.

What the Sector Is Watching

The twin pressures — high freight costs on the export side and rainfall deficits on the production side — mean the recovery, while real, remains fragile. Industry stakeholders remain cautiously hopeful that a sustained revival in Gulf demand will restore price stability to the Pollachi coconut belt, even as they brace for a potentially tighter supply cycle ahead.