With the Mullaperiyar issue becoming a sticking point, coconut oil arrivals into Kerala have fallen sharply and prices in Tamil Nadu have plunged.

“Arrivals from Tamil Nadu have fallen to a quarter of the previous levels and prices in Kerala remain subdued,” Mr Prakash B. Rao, Vice-President of the Cochin Oil Merchants Association (COMA), said.

Coconut oil prices were quoting at Rs 79 per kg in Kerala markets and Rs 74 in Tamil Nadu. Copra prices have also fallen to Rs 53 per kg in Kerala and Rs 50 in Tamil Nadu markets. With corporate demand also not surfacing, the prices are likely to remain low, sources in the market said. This is even as prices of competing edible oils have been strengthening. Coconut arrivals from Andhra Pradesh are also stifling prices in Tamil Nadu.

With the erosion of the rupee against major currencies, imported edible oil prices have been moving up. Also, speculators have moved into edible oils as the price spurt became more pronounced. Normally coconut oil prices would also have moved up in tandem with the strengthening edible oil prices or it would have tempered the price rise.

However, this time nothing of that nature seems to be happening as coconut oil prices have become a hostage to the Mullaperiyar issue.

The increased demand for coconuts during the Sabarimala pilgrimage season is likely to strengthen the price trends. But the subsequent conversion of Sabarimala coconut to copra and then to coconut oil might ease prices further, although not very significantly, sources added.

The prices of competing edible oils like palm oil have moved up sharply to Rs 64 while palm kernel oil prices have shot up to Rs 72 per kg – very close to coconut oil prices.

Unless the Mullaperiyar issue is kept in the backburner or corporate demand re-surfaces, coconut oil prices are not expected to make any recovery. While farmers in both the States stand to lose, the consumers in Kerala have reasons to rejoice.

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