Coconut oil prices in the Kerala market improved slightly this week, thanks to short covering from traders anticipating monsoon rains.

The prices in Kerala had gone up to Rs 59/kg against Rs 57 last week. The rates in Tamil Nadu also moved up to Rs 57 from Rs 54.

Mr Prakash B. Rao, Vice-President, Coconut Oil Merchants Association (COMA), said that usually traders expect the market to firm up during monsoon. In anticipation of that, short covering resulted in coconut oil prices going up, he said.

He said corporates are still not active in the market and are waiting for the market to decline further to start fresh buying. However, the supply of coconut decreased in the Kerala market while higher arrivals were reported from the Tamil Nadu markets. The supply of coconut oil and copra will be affected if the monsoon rains progress as on schedule, he said.

Copra prices moved up both in the Kerala and Tamil Nadu markets. The prices in Kerala stood at Rs 4,000 a quintal against Rs 3,800 quoted last week. The prices in Tamil Nadu were ruling at Rs 3,800 (Rs 3,400 last week).The prices of edible oils, such as palm oil and palm kernel oil which are close substitutes of coconut oil, also fell this week due to rupee fluctuation against dollar. Palm oil quoted at Rs 64/kg against Rs 72 last week, and palm kernel oil at Rs 70 against Rs 74 last week. Mr Bharat M. Khona, former Board Member, COMA, said that there is a slow tendency in the market to rise and the market is likely to stabilise in the coming weeks.

Mr Thalath Mahamood, President, COMA, reiterated the demand for commencement of copra procurement by government agencies for stabilisation of prices in the market. However, the Coconut Development Board officials admitted that the farmers are not getting the benefit of minimum support price as copra procurement is moving very slowly. As on May 18, Kerala procured only 742.54 tonnes and Tamil Nadu, 5,583.65 tonnes.

sajeevkumar@thehindu.co.in

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