Market integration for coconut

In India, the coconut is grown in 22 states with a total cultivated area of 2198 thousand hectares and a production of 21,384 million nuts which makes India stand Third in the World. The coconut processing is undertaken in a major level only in the districts of Coimbatore (50 per cent), Tirupur (15 per cent), Thanjavur (17 per cent), Kanyakumari (12 per cent), Dindigul (6 per cent), Theni, Erode, Dharmapuri, Krishnagiri and Salem which accounts for majority of production of coconut, copra and coconut oil in Tamil Nadu State. In the total coconut production of the country, 52 per cent is consumed in raw-form. About 95 per cent of this is used for household utilization and about 5 per cent is used for small-scale industries like manufacturing of coconut value added products like desiccated coconut, coconut cream, coconut milk powder, Nata-de-coco etc. Market integration between the copra and coconut markets are tested in the study. These was tested for the presence of long run relationship among the major markets of copra and coconut in India. The causal relationship among the markets price of major copra and coconut market in India were estimated and these were highly integrated. Among the various markets, Kerala market came to equilibrium in short run. But, in long run, Karnataka, Kerala and Tamil Nadu markets were influenced by one month lag of Tamil Nadu market prices. Unidirectional relationship was found between Tamil Nadu and Karnataka Markets.