The Tobolar Copra Processing Authority announced Friday it will slash prices paid to producers of the dry coconut meat by 30 percent starting Nov. 1, a big blow to the industry that is the economic mainstay for remote outer islanders and, as hardship increases, for urban residents alike.
Members of parliament earlier in the week questioned the price cut.
Sen. Donald Capelle, who represents the distant atoll of Likiep that has a population of about 500, asked the government to supply MPs with detailed price information on oil sales and costs of production so the parliament can assess the level of subsidy needed to maintain higher prices.
“Based on world market prices, we had no choice but to drop the price,” said Tobolar Copra Processing Authority Chairman Jemi Nashion, an assistant secretary at the Ministry of Finance.
The price will drop from the current 23.5 cents to 16.5 cents per pound in Majuro the capital, and from 22 cents to 15 cents per pound on the outer islands, an approximately 30 percent drop.
Even at the lower price, the government’s copra company may have difficulty keeping the price at this level through next September, the end of the current fiscal year. The parliament last month approved its fiscal year 2010 budget with a $1.2 million subsidy for copra.
“That will probably cover the price for 10 months,” Nashion said. He expressed hope that the world market price will rebound. But if the world market price drops, “we will absolutely need more money to maintain the price,” he said.
Thanks to the highest monthly haul of copra from the outer islands in 12 months in September of over 700 tons, the Marshall Islands ended fiscal year 2009 with 6,550 tons of copra — the sixth highest 12-month total ever.
Although this amount is down by more than 1,000 tons from 2008, when the second highest total tonnage of 7,641 was produced since statistics began being kept in 1951, 2008 and 2009 represent two of the strongest copra producing years on record for the Marshall Islands.
