Coconut oil rules high on sparse arrivals

Contrary to expectations, coconut oil prices continue to rule over Rs 100 a kg in the third week of the peak production season in Tamil Nadu.

There has been no substantial increase in arrivals of either coconut oil or copra into the Tamil Nadu markets. Coconut oil at Kangeyam, a major production centre in Tamil Nadu, quoted Rs 101 a kg. Prices in Kerala were a notch higher at Rs 104 a kg.

Copra prices in both the Tamil Nadu and Kerala markets quoted at Rs 73 a kg. The present price differential between the two States was partly due to the cheaper labour costs in converting copra to coconut oil in Tamil Nadu, sources in the Cochin Oil Merchants Association (COMA) said.

Prices of substitutes such as palm oil and palm kernel oil continued to rule steady at Rs 61 and Rs 95 a kg respectively.

After the long wait for the coconut oil prices to cool, some corporate companies have begun exploring the possibility of importing substitutes for the manufacture of their soaps, cosmetics and shampoos. Some soap manufacturers are thinking of importing cheaper substitutes like palm fatty acid distillates, where the landed cost could be around Rs 65-68 a kg.

This would have to be further processed to meet the quality requirements of the Indian soap and cosmetic industry and the final price would be around Rs 70 a kg, much lower than the current coconut oil price, sources in the trade said.

However, even after further processing, palm fatty acid distillate is likely to be inferior to coconut oil in terms of lathering and texture qualities. Manufacture of white soaps would still require coconut oil, sources pointed out.

With intense summer setting in over North India, the movement of tender coconuts to quench the thirst of the parched cities of the North has begun.

The movement is most often from Tamil Nadu and Andhra Pradesh. Selling at Rs 20 a tender coconut, it fetches handsome returns to the farmer with no additional effort.

With the middlemen taking a cut and the labour costs involved, several farmers are switching over to selling their produce as tender coconuts.

And reports indicate that there has been no respite in exports to Bangladesh, Pakistan and Gulf countries which used to be fed by supplies from Sri Lanka earlier.

COMMENT NOW