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Panic sales coupled with low corporate demand have impacted the coconut oil market both in Kerala and Tamil Nadu this week.
The market, after a spurt in prices that went up to Rs 73/kg few weeks back, has declined sharply to Rs 68 in Kerala this week due to lower demand from corporates as well as local consumers.
Last week, the prices were quoted at Rs 70 a kg in the State.
According to Prakash B. Rao, Vice-President, Cochin Oil Merchants Association (COMA), the market is witnessing a panic trend due to quoting of oil at much lower price by large scale producers. Elsewhere in Tamil Nadu, the prices, after hitting Rs 70, came down to Rs 63 .
Copra prices also declined sharply to Rs 4,600 a quintal in Kerala (Rs 5,200) and Rs 4,400 in Tamil Nadu (Rs 5,000). The availability of copra in Kerala is very low compared to Tamil Nadu, he said.
It is also reported that large quantities of dry coconuts are being stocked by traders as well as major corporates on anticipation of future needs. This has also affected the availability of the commodity in the market, he said.
Even the subsidiary oils such as palm oil and palm kernel oil are quoting Re 1 lower at Rs 54 a kg and Rs 52 a kg respectively.
Thalath Mahamood, former President, COMA, pointed out that his assessment that the market was going through an ‘artificial boom’ had proved correct as is evident from the huge drop in prices this week.
He said that the absence of an upcountry and local demand resulted in the downward trend in prices and this selling trend may witness in the next couple of weeks before it goes up.
Bharat N. Khona, former Board Member, COMA, said that continuing monsoon and lack of an upcountry demand had also made an impact in the market, he said.
sajeevkumar.v@thehindu.co.in
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