The Hindu Business Line : Coconut oil prices continue to decline

Coconut oil price has dropped to Rs 5,050 a quintal from Rs 7,100 a quintal during the same period a year ago. However, this decline of around Rs 2,000 a quintal has not been reflected on the retail prices of branded oil, market observers here pointed out. Branded products are sold at Rs 75-85 a kg, while loose oil at Rs 62 to Rs 65 a kg.

Meanwhile, palm oil is available at Rs 40 a kg and this has led to a consumer-shift towards this oil believed to be unadulterated. Palm oil, which was not in the market till the beginning of the 1980s has a market share of around 36 per cent now, they said.

With a per capita consumption of 12 kg a year, the demand for edible oils in the State is estimated at around 3.7 lakh tonnes. The availability of coconut oil has dropped to around 1.6 lakh tonnes from over two lakh tonnes production few years back, they said.

"Demand for palm oil is on the rise because of its low price besides being unadulterated," they claimed.

According to them, as the international price of coconut oil is ruling at $550 a tonne, the industry in the country is of late depending on imported oil. Besides, imported coconut oil is available in the north Indian market also at low prices. Added to this, oil extracted from the coconut cakes by the solvent extraction units is also entering the market to push down the oil prices, they alleged.

The main consumers of coconut oil are those in the middle class, while the rich prefer other refined oils. The poor are the main consumers of palm oil available at around Rs 40 a kg. Its demand is estimated at around two lakh tonnes.

However, sources claimed that the artificial fluctuation that was prevailing in the market for some time, which was detrimental to the coconut farmers and consumers seemed to have stopped now following a report in these columns a couple of months back. According to them, the speculators were responsible for the wild fluctuations. Some were manipulating the prices by taking comfortable short positions in the futures market, they alleged.

The toiletry sector, especially the bathing soap manufacturers, was using coconut oil to the extent of around 23 per cent of its total oil requirement until recent years. Ever since the price started shooting up, its off-take has dropped to around five per cent.

In its place, palm kernel oil and other cheap oils and distillates are used and this has also brought down the demand for coconut oil.

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