Coconut oil prices remain steady amid subdued demand

The absence of a strong upcountry demand seems to have led coconut oil prices to remain more or less steady over the past few days in Kerala and Tamil Nadu.

Traders said the worsening Covid situation in many consuming centres, especially in North India, has created subdued demand for coconut oil, with its price hovering around ₹141 per kg in the last couple of days. The rates had touched ₹160 earlier. Traders attributed the diminishing demand to the closing down of hotels, cancellation of weddings and other functions that had affected consumption.

Even the sale of branded coconut oil and other high-end products made of coconut has also come down following the closure of shopping malls. According to traders, this has forced many leading manufacturers to reduce their copra procurement from the open market, even though there are allegations that some firms have indulged in influencing the prices according to their production requirements.

Copra prices dip

Copra prices have also started moving southwards, hitting ₹95 per kg in Kerala and ₹89 in Tamil Nadu. Lower consumption in North India has also affected the movement of ball copra, especially from Karnataka and some parts of Kerala. Some quantity is finding markets in neighbouring countries such as Pakistan and Bangladesh.

Thalath Mahmood, President, Cochin Oil Merchants Association (COMA), said traders expect a further downward trend in coconut oil prices due to lower consumption as the pandemic has severely impacted the purchasing power of people. Coconut oil has been used as a cooking medium in many parts of the State and Covid has resulted in reduced intake, he added. Raw nut prices have also come down to ₹28 per kg from ₹38-40.

However, official sources predict positive trends as further relaxations in the lockdown are expected to revive the demand for coconut oil. Prices are not expected to decline further, as the opening of restaurants and malls, coupled with the Onam season, will boost the demand for coconut oil, they said.