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Thin arrivals of both copra and coconut oil have boosted the prices of these commodities to record levels in both the Kerala and Tamil Nadu markets.
Coconut oil prices touched Rs 80 per kg (Rs 77) in Kerala, while they went up to Rs 76.50 per kg (Rs 74.50) in Tamil Nadu.
Copra prices also showed an upward trend at Rs 6,000 per quintal (Rs 5,600) in Kerala, while the figure in Tamil Nadu was Rs 5,800 per quintal against last week’s price of Rs 5,500.
Prakash B. Rao, the newly appointed President of the Cochin Oil Merchants’ Association (COMA), said large-scale traders in Tamil Nadu have started stocking copra in huge quantities and this has triggered a price rally.
With the off season in Tamil Nadu beginning next month, prices would further firm up in the coming weeks due to copra scarcity. This could be expected to continue until new arrivals come in February, he said, adding that there might be limited price volatility in the meantime.
He said upcountry demand has slowed down due to the price rise. Corporates are finding it difficult to get bulk quantities of copra, which has also been attributed to the price increase. Besides Onam, the market is pinning its hopes on festival demand from North India, he said.
Though palm oil prices remained at Rs 68 per kg quoted last week, palm kernel oil prices went up to Rs 71 against Rs 70 quoted last week. Palm kernel oil is a close substitute of coconut oil.
Whenever there is a surge in coconut oil prices, palm kernel prices follow.
This has led to a situation where multinational companies in the food products business now prefer palm kernel oil to coconut oil for production, helping to boost the price of the produce, he said.
Thalath Mahamood, the new Director of COMA, said the market is steady due to local festival demand. Inclement weather in Tamil Nadu had led to copra shortage, raising prices to a new level above the minimum support price of Rs 5,250 per quintal announced by the Government.
He also highlighted the concern raised by milling units on the low quality copra released from the warehouses of designated procurement agencies.
Bharat N. Khona, former Board Member, COMA said the rising price of copra and its shortage has an impact on the coconut oil market, resulting in price rise and less upcountry demand. The loose oil market for 15-kg coconut oil in Tamil Nadu is ruling at the same level of Rs 1,140 quoted last week.
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