We have observed the same effect for polyaniline in which when it was coated with cobalt ferrite its electrical conductivity was decreased. The precipitation of CuO on PVA probably prevents the free movement of charge in PVA due to the interaction of PVA with the copper metal of CuO.
Cupric oxide is a well known p-type semiconductor with a narrow band gap of 1.2 eV. Thus; it reduces the dielectric constant of the insulating PVA matrix.