As the surplus held with stockists and traders hit the market last week, coconut oil prices crashed in both Tamil Nadu and Kerala. Coconut oil prices plunged by close to Rs 15 in Kerala to Rs 83 a kg, while it was even more marked at Rs 20 in Tamil Nadu to Rs 73a kg.

Despite the plunge in prices, the buyers are keeping away from the market and are waiting for further falls. Corporate buyers, who mainly operated out of Tamil Nadu, have lowered their buying price and are biding their time. In Kerala, Kerafed has lowered its copra procurement price from Rs 60 a kg last week to Rs 50 a kg in just a week, Mr Prakash B Rao, Member of the Cochin Oil Merchants Association (COMA) said. The trend is being emulated by all buyers.

A large number of coconut oil packet retailers, who priced it at Rs 125-130 a litre at the shop floors, will have to recall their stocks and repack them with lower price tags for redistribution and sale. Sources also pointed out that there was a fair amount of adulteration of coconut oil with cheaper edible oils earlier, as the price differentials proved attractive. Now the trend of adulteration is also expected to be arrested.

Palm kernel oil prices have also gravitated lower to Rs 74 a kg while palm oil was quoting Rs 56 a kg. The fall in coconut oil, palm oil and palm kernel was due to easing price trends in global edible oil markets, trade sources said. They expected the prices to fall further before stabilising anywhere between the Rs 70-80 level. There have been large scale emigration by large consumers in the bakery and soap industry to other cheaper edible oils as coconut oil prices skyrocketed. Now, the demand could look up and prices stabilise once the prices reach the Rs 70-80 range.

It would seem that benefit of the last price rise did reach the customer as there were large arrivals of coconuts in Tamil Nadu markets while the price of copra and coconut touched new highs. The lower levels would be beneficial for the grower and the consumer.

Related Topics
comment COMMENT NOW