Coconut oil prices in Kerala and Tamil Nadu dropped this week, as demand shifted to other cheaper edible oils.
According to Cochin Oil Merchants Association Vice-President Prakash B.Rao, most industrial buyers are purchasing more palm kernel oil due to the huge price gap compared with coconut oil.
He said that palm oil and palm kernel oil are ruling at Rs 58 a kg and Rs 52 a kg against last week’s Rs 61 and Rs 54 respectively.
Besides, bulk imports of crude palm oil from Malaysia and news of lower export duty in that country have also led to a price fall in coconut oil. Prices may decline further in the short term, he said.
Coconut oil in Kerala is ruling at Rs 60 a kg (Rs 62) and Rs 58 in Tamil Nadu (Rs 60). Copra stood at Rs 4,200 a quintal in Kerala (Rs 4,300) and at Rs 4,100 in Tamil Nadu (Rs 4,200).
Thalath Mahamood, former President of the Association, said that absence of local demand and lower prices of other edible oils have dented market sentiment in Kerala. Traders have no hopes of demand rising during Diwali. Moreover, there has been a selling pressure in Tamil Nadu due to change in weather, he said.
Bharat N. Khona, former Board Member of the Association, said prices may go down further due to lower prices of substitute oils. North Indian buyers are also reluctant to purchase coconut oil at such high prices, he said.