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Tracking global edible oil prices and supply constraints have led to an upward trend in copra and coconut oil prices over the past few weeks.
Both milling copra and edible copra (ball copra) prices have shown an increase over the past one month while the coconuts prices have also shot up in retail markets.
Milling copra prices have moved up by about 30 per cent and are hovering in the range of ₹132 per kg in Kerala and ₹130 in Tamil Nadu while coconut oil prices have touched ₹188 and ₹185, respectively. At Tiptur, the largest market for ball copra in Karnataka, modal prices have moved up from around ₹12,300 per quintal levels in early November to cross the ₹15,000 mark. The winter demand from the northern states, where copra consumption goes up during these months, has also aided the price trend.
Till October-end, modal prices of ball copra were hovering below the MSP level of ₹10,300 per quintal in Karnataka, forcing Nafed (National Agricultural Cooperative Marketing Federation of India) to begin procurement. Nafed has so far made a progressive procurement of 5,053 tonnes of ball copra during the 2020 season, while in Tamil Nadu the purchases of ball copra stood at 13.30 tonnes.
Nafed has also progressively procured 35.58 tonnes of milling copra in Tamil Nadu at an MSP of ₹9,960 per quintal as on December 1.
Festive season demand
Thalath Mahmood, President of Cochin Oil Merchants Association (COMA), said that not only coconut oil, but all edible oils such as sunflower, rice bran, palm oil prices are moving northwards since the Onam festival season, forcing consumers to shift to more cheaper oils. The raw coconut prices also went up at ₹58-50 per kg in the wholesale market.
KK Devaraj, consultant, KPL Sudhi Coconut Oil, said that the rising trend in global edible oils prices is due to climatic conditions and various other issues and it started reflecting in the copra and coconut oil market. The trend is expected to continue for some more time. An arrest in prices can be expected with the commencement of the harvest season in Kerala by mid-December or early January.
Coconut Development Board officials cited supply constraints of copra in the domestic market as a reason for the increase in rates. India is the largest producer of coconuts and the production stood at 21308 million nuts during 2019-20.
Exporters feel the pinch
Industry sources added that coconut oil exporters are forced to depend on the domestic market for copra procurement as State Trading Corporation has refrained from issuing NOC to import copra from December. The DGFT is now in the process of engaging a new agency for the job. However, the delay in finalising an alternate agency has pushed exporters into a corner, the sources added.
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