Coconut oil prices were virtually holding steady both in Tamil Nadu and Kerala markets. There were very few enquiries and no significant buying or selling activity in the markets, sources said.

There was a minor rally in coconut oil prices that are holding firm at Rs 99 a kg in Tamil Nadu and Rs 97/kg in Kerala markets, Mr Prakash B. Rao, Member of the Cochin Oil Merchants Association, said. The firm price trend is likely to persist until the pace of conversion of copra into coconut oil accelerates in Tamil Nadu. Reports indicate that there is a shortage of labour to undertake the conversion process in the coconut growing regions of Tamil Nadu.

Rains

Arrivals of both coconuts and copra into the Tamil Nadu market continue to be good. This, sources said, was the prime reason why the prices have not rallied further. But the recent spell of rains could deter the conversion of coconut into copra and the prices could pick up.

However, reports indicate that growers are surfeit with stocks and the arrival of coconuts into the markets is likely to persist. The Coconut Development Board had indicated that production from Tamil Nadu is likely to be higher this year, which could bridge the expected shortfall from Kerala producers. Kerala is expected to register a 15-20 per cent decline in coconut production this year.

Global shortfall

The firm price trends are likely to persist given that a global shortfall in coconut production expected this year. Mainly due to climate change, production from Philippines, Indonesia and Sri Lanka, some of the largest coconut producers in the world, are expected to be lower. This has accelerated the pace of India's coconut and copra exports to destinations like the Gulf countries, Pakistan and Bangladesh: which traditionally source their import requirements from Sri Lanka.

Competing edible oils like palm oil was quoting at Rs 59/ kg, while palm kernel oil was at Rs 94.

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