Coconut oil prices have turned volatile in Tamil Nadu and Kerala this week with prices dropping initially and then rising on Wednesday. But copra prices continue to rule firm on shortage.

“Coconut oil prices dropped to ₹1,970 for 15 kg on Tuesday but increased for no valid reason on Wednesday to ₹2,050 initially before closing at ₹2,100,” said RM Palanisamy, a trader in Erode.

The volatility saw only two loads (20 tonnes) being traded. “The rise is merely due to speculation. There is no justification behind it,” he said.

Earlier this week, prices dropped following selling pressure. Compared with last week, prices in Kerala dropped to ₹2,200/15 kg from ₹2,250.

Thalath Mahmood, Director, Cochin Oil Merchants Association (COMA), said that the price fluctuation is cyclical and the market is expected to pick up in a couple of days due to low arrivals and copra shortage.

The higher price trend is likely to continue. But oil crushers in Tamil Nadu say prices have to drop for demand to pick up.

Bharat Khona, former Board Member of COMA, said that upcountry buyers are staying off the market at these price levels and demand was subdued.

Copra is ruling steady at ₹10,400-10,500 in Kerala and Tamil Nadu against ₹10,200 last week.

Copra trade

Palanisamy said huge quantities of coconut are being brought to Erode from Kerala and Mysore for conversion to copra. In Erode, copra on Wednesday ruled at ₹9,300 against ₹10,200 last week.

In Erode’s Perundurai market, over 120 tonnes of copra were sold with Kerala crushers making the purchase.

Palm oil is currently selling at ₹5,790 and palm kernel at ₹9,200 a quintal. Demand for palm group of oils has picked up due to surging coconut oil prices.

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