Declining copra prices dampened the hopes of the trading community in realising business potential during the ensuing Vishu festival season in Kerala.

According to traders, copra prices in Kerala are ruling at ₹82.50 per kg, while it was ₹80.50 in Tamil Nadu. The case of coconut oil is similar with the rates ruling at ₹128 per kg in Kerala, while the Tamil Nadu prices are down to ₹112.50.

Also read: Copra prices rule below MSP on muted demand, higher supplies

Thalath Mahmood, director, Cochin Oil Merchants Association (COMA), said the market is already passing through a sluggish trend for coconut oil and other edible oils and is expected to continue in the short-term. He attributed the reason to surplus production across centres and the availability of sufficient stock in the market. The geopolitical situation, too, has dragged prices of edible oils, which have been ruling low for quite some time.

Stocks impact

Ubais Ali of Mezhukkattil Mills said there will be further resistance in prices with the starting of the harvest season in Tamil Nadu by next month. Nafed has already procured 40,000 tonnes of copra under MSP from farmers and the concern of liquidating the stocks, considering copra’s shelf life, is likely to impact prices further.

The export market is also weak because of the global slowdown and copra prices are likely to remainbetween ₹75 and ₹85 throughout the year without any further corrections, he added.

KK Devraj, a business consultant in the industry, said consumer demand for coconut oil is currently low. The comparative cheaper prices of sunflower oil and the abundant inflow of cheap palmolein resulted in the present low demand. Due to the increasing eat-out food habits of consumers, the household purchase of all edible oils, including coconut oil have come down considerably and shifted to the HORECA segment, which houses more than 90 per cent of palmolein and sunflower oil. Very few of them depend on coconut oil, mostly because of the price advantage that sunflower oil and palmolein have. Demand from North India and from industry is also not seen due to the availability of substitute products.

On the supply side, he said lower-priced copra and coconut oil from Karnataka and Tamil Nadu have kept Kerala market prices low. After the Vishu season, traders expect more copra inflow from the local markets, which may push prices further down. Global prices of vegetable oils have been on the downtrend recently and these have also influenced prices, he said.

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