With most traders and packers of coconut oil having stocked up for the upcoming Onam festival in Kerala, coconut oil prices have eased a shade both in the Kerala and Tamil Nadu markets. Prices were quoting at Rs 98 per kg in Kerala's wholesale markets, and at Rs 96 per kg in Tamil Nadu. Demand was muted and there were good arrivals in Tamil Nadu's major production centres, sources in the trade said.

Indicating that traders and packers of coconut oil have built up sufficient stocks for the Onam season, they said coconut oil arrivals in Kerala's markets have shrunk to almost a fourth.

Bulk coconut oil purchased from Tamil Nadu has been repackaged into smaller retail packets for the Onam season, sources in the trade said. The demand from Kerala seems to have wound up for the moment and further demand is expected from upcountry buyers during the festival season of Navarathri and Deepawali.

But the demand is yet to manifest and prices are expected to remain at their current levels or drop lower for now. Industrial buyers are also keeping to the sidelines, making coconut oil prices tentative.

Palm oil and palm kernel prices have been battered in the global markets on the back of global uncertainties. Palm oil was quoting at Rs 58 per kg in the wholesale market and palm kernel oil at Rs 78 per kg.

The marked price difference between coconut oil and palm oil as well as palm kernel oil is likely to contain any immediate rise in coconut oil prices. If the price differentials widen further, industrial producers are likely to shift to palm kernel oil and retail consumers to palm oil. The better conversion ratio of palm kernel oil into soap and cosmetic is an added incentive, trade sources said.

Copra was quoting at Rs 65 per kg in the Kerala markets, while it was at Rs 63 per kg in Tamil Nadu.

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