Fall in palm oil prices in the international market has impacted coconut oil prices both in Kerala and Tamil Nadu this week.
Coconut oil prices in Kerala are now ruling at Rs 61.50 per kg (Rs 63), whereas in Tamil Nadu the prices fell to Rs 58 per kg (Rs 60).
Prakash B. Rao, Vice-President, Cochin Oil Merchants Association (COMA), told Business Line that the cheaper availability of palm oil and palm kernel oil, which is a close substitute of coconut oil being used for industrial purpose, has resulted in low demand from corporates and upcountry buyers.
Cheaper palm oil
He pointed out that majority of industrial buyers and even retail traders doing food and bakery business have shifted to palm oil, which is now cheaper than coconut oil.
Palm oil prices are now trading at Rs 48 per kg, while palm kernel oil at Rs 51 per kg.
Copra prices down
Simultaneously, copra prices also dropped to Rs 4,450 per quintal (Rs 4,600) in Kerala, while in Tamil Nadu, the prices fell to Rs 4,300 from Rs 4,500 per quintal quoted last week.
Summer season demand for tender coconuts in Tamil Nadu and Kerala markets also affected copra arrivals, he added.
Thalath Mahamood, former President, Cochin Oil Merchants Association (COMA), said that a panic situation is prevailing in the market due to low demand. To arrest this trend, he has suggested speedy copra procurement drive by the designated agencies.
Quoting news reports, he said the issues connected with payment of compensation to the agencies involvement in copra procurement have been resolved and the Government should take steps to start the drive at the earliest.
Bharat N. Khona, former Board Member, COMA, attributed the cheap imports of other edible oils as the reason for this continuing price fall in coconut oil.
If the market stabilises at this lower rate, he said upcountry buyers and corporates may enter the market to purchase coconut oil.