India’s status as the largest exporter of activated carbon is at risk due to a severe shortage of coconut shell charcoal, the primary raw material for activated carbon production. The industry is facing challenges such as increasing manufacturing costs, declining availability of coconut shell and charcoal, growing global demand for gold carbon, and fluctuating freight charges.
Joshy Joseph, Director of INDCARB, a manufacturer and exporter of activated carbon based in Palakkad, stated that many activated carbon manufacturing units in South India are being forced to increase working capital requirements and reduce production capacity due to these challenges. The price of coconut shell charcoal has skyrocketed to around ₹60,000-62,000 per tonne, compared to ₹27,000-28,000 per tonne in January 2024.
In the previous financial year, the export of coconut products, including activated carbon, amounted to approximately ₹2,108 crore, down from ₹2,369 crore in the preceding year. Activated carbon is in high demand in countries such as the US, UK, Germany, Belgium, Italy, Japan, South Korea, and African nations. It is used for water treatment in many developed countries and for gold extraction in Africa, where the gold mining industry accounts for 55-60% of activated carbon usage.
The global activated carbon market is currently valued at $4.4 billion and is expected to reach $7 billion by 2028, with a compound annual growth rate (CAGR) of 9.5%. However, the situation in India is alarming, with Chinese companies potentially gaining a significant market share as they import charcoal from the Philippines to keep their plants operational.
To address these challenges, the Activated Carbon Manufacturers Association of India has advised its members not to purchase charcoal above ₹60,000 and coconut shell above ₹20,000. They have also urged the government to consider banning charcoal exports to protect the domestic industry. Last year, charcoal exports from India totaled around 35,000-40,000 tonnes.
There are concerns that certain intermediaries posing as charcoal traders are holding large stocks in anticipation of further price increases, further exacerbating the situation. To safeguard India’s position as a key player in the global activated carbon market, urgent measures need to be taken to address the shortage of coconut shell charcoal and ensure the industry remains competitive on the international stage.
