Coconut oil slips before peak arrivals

In anticipation of the peak-production season in Kerala, coconut oil prices have begun to ease. Sources in the market said increased arrivals are expected in the next 7-10 days, and prices are expected to slip further. From the Rs 100 a kg quoted a week ago, coconut oil has eased to Rs 96 in Kerala markets and Rs 94 in Tamil Nadu markets.

Demand from upcountry manufacturers of coconut oil-based hair oil, shampoo and other cosmetic manufacturers have eased for the moment. Though arrivals of copra are quite low, traders are not willing to hold stocks as copra prices are expected to ease further in the coming days.

Copra prices have plunged from Rs 70 a kg last week to Rs 66. Traders are liquidating their stocks in anticipation of weakening prices and increased arrivals.

Exports

A fall in coconut production in neighbouring countries such as Sri Lanka, Pakistan and Bangladesh had resulted in global surge in coconut prices.

There was large scale exports to these countries during December and January which lead to price escalation in domestic markets, Mr Prakash B. Rao, Member of the Cochin Oil Merchants Association (COMA) said. However these exports have abated in recent weeks and a price correction was long overdue, he added. The produce for most of these exports was sourced from Tamil Nadu. The coming months are expected to witness increased arrivals into the markets as peak production season sets in over the Southern States. The peak production season in Kerala is expected to last into the coming couple of months.

Once the production season begins to abate from Kerala, the peak season is expected to set in over Tamil Nadu from the beginning of April. This will be followed by peak production from Karnataka. Despite the easing of coconut oil prices, palm kernel prices continued to reign at Rs 110 a kg while palm oil was quoting at Rs 68 a kg in Kerala markets.