Coconut oil prices dipped to Rs 93 a kg in Tamil Nadu markets due to increased arrivals and unwillingness of the farmers and millers to hold on to large stocks built during the peak production season.
However, with increased consumption demand beginning to manifest, prices continued to hold firm at Rs 97 a kg in Kerala.
The firm situation in Kerala is likely to persist in the coming weeks as the advent of heavy monsoon rains have brought the curtains down on the State's peak production season. Whatever little domestic coconut oil that was available in the market has dried up and the State is solely dependent on Tamil Nadu for its requirements, sources in the trade said.
There was uncertainty in the market as to which direction the prices would take in the coming weeks given the good demand from Kerala and the large supply situation building up in Tamil Nadu. With good availability and dipping prices in Tamil Nadu markets, industries are building up large stocks during the peak arrivals in the State.
For the bulls, the question remains whether increased demand from Kerala would tilt the balance and perk up prices in Tamil Nadu also. On the other hand, the substantive demand for tender coconuts from North India is bound to wane as the monsoon advances up the Western coast.
The season of festivals is also getting over in North India along with the demand for edible copra and the festive trends would revive only during the coming Deepavali season.
The price patterns in the coming weeks would be dictated by the extent of the crop size from Tamil Nadu and the size of demand this season from Kerala as well as pent up industrial demand. The production from Tamil Nadu is expected to be up and should be able to bridge the expected shortfall from Kerala, sources in the Coconut Development Board had said.
Palm oil and palm kernel prices were holding firm at Rs 59 and Rs 94 per kg. Palm oil and palm kernel oil arrivals continued unhindered from Malaysia and the major industries dealing in these edible oils were holding large stocks, market sources said.