Coconut oil prices rebound back to Rs 88 a kg even as the recovery has been more pronounced in Tamil Nadu markets where it jumped to Rs 87 a kg.

Almost all the demand last week came from Kerala, while Tamil Nadu was the top supplier. Industrial demand has slackened as buyers have shifted from coconut oil to palm fatty acid and other edible oils. With persistent rain in Kerala, arrivals of local copra and coconut oil declined in the State and it is now solely dependent on Tamil Nadu, Mr Talat Mahmood, President of the Cochin Oil Merchants Association (COMA), said. The trend in the coming days will depend on purchases from the three biggest industrial buyers in the country: Marico and Shalimar from the Tamil Nadu and Kerafed from the Kerala market.

After a sharp recovery last week, the market should pause for sometime before going in any definite direction, Mr Prakash B Rao, Member of COMA, said. The demand from Kerala, which could average 100 tonnes a day would be the major buffer for the coconut oil price line in the coming days.The onset of the festival season from next month will raise demand for edible copra from North India.

The upcoming Navratri festival is expected to boost demand from north Indian buyers, as is the case with the succeeding Diwali season. Weeks leading up to Onam in Kerala will also spur demand. There is bound to be some diversion to edible copra from mill copra in the coming months as the price difference between the two sometimes goes up by as much as Rs 10 a kg, Mr Rao said.

Copra prices have shot up to Rs 60 a kg in Kerala, while they have surged to Rs 58 a kg in Tamil Nadu markets. Prices of palm kernel oil have dropped to Rs 72 a kg; and Rs 56 a kg for palm oil. The depressed price of palm oil and palm kernel would also be a deciding factor in deflating coconut oil prices in the weeks to come, sources in the trade said.

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