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There has been a steady upward bias in coconut oil prices over last week as several sellers have shifted from the spot to futures markets and availability has declined, Mr Talat Mahmood, President of the Cochin Oil Merchants Association (COMA), said.
The wide disparity between Tamil Nadu and Kerala prices have also been bridged with increased demand and large coconut oil inflows into Kerala. Going by the current trend, the prices are expected to remain stable for the moment and potential direction would be evident maybe a week later, trade sources said.
After the sharp fall of last week, coconut oil prices recovered to Rs 80 a kg in Tamil Nadu and Rs 84 in Kerala markets, Mr Prakash B Rao, Member of COMA, said. However, buying continues to be mainly from Kerala and the large industrial buyers were not very active. In fact, corporate buying price for copra was still at Rs 50 a kg as big players bid their time, assessing which way the market was turning.
The downward pressure on coconut oil was created as huge stocks built up in Tamil Nadu were being released into Kerala before the onset of the Aadi month, Dr K Satheesh Babu, Professor of Kerala Agricultural University, said. The huge influx of coconut oil, copra and coconut into Kerala has also helped to bridge the price differentials existing between the two States.
Dr Babu expected the falling trend to be a temporary phenomenon as the peak coconut production season in Tamil Nadu will end by July and prices are expected to recover from August.
adulteration
Marked price differentials between coconut oil and palm oil have always increased the tendency for adulteration. However, with palm oil prices ranging around Rs 59 a kg and palm kernel oil at Rs 74, the adulteration tendency is still being kept at bay. The increased availability of coconut oil would also dissuade adulteration, Mr Talat Mahmood pointed out.
Prices are expected to remain stable as big corporate buyers have built sizeable inventory of competing edible oils during the peak coconut oil prices of the last few month and are not expected to rush into the market. On the flip side, the huge stocks, which had been built up in Tamil Nadu, are being slowly being unwound and released into the market.
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