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After lying low for the past couple of weeks, coconut oil prices are beginning to look up. While prices continued to remain depressed, there has been bottom fishing by several corporate companies and coconut oil prices firmed up slightly last week, sources in the market said.
Coconut oil prices moved up from Rs 72 last week to Rs 74 a kg in Tamil Nadu , while they inched from Rs 75 to Rs 76.50 in Kerala . Although the price rise has been not very significant, volumes bought by corporate companies last week have been large, the sources said.
This has depleted the huge stocks built up by the traders of Tamil Nadu over the past weeks and there are reports of some short sales as well. While the inventories have dwindled, fresh arrivals are likely to trickle down. With most coconut oil mills and copra drying units in Tamil Nadu likely to remain closed during the coming Pongal days, coconut oil arrivals into Kerala markets are expected to dip.
Also, this being the lean season in Kerala, production from within the State is not expected to be sufficient to meet its internal demand. Under these circumstances, there could be a small rally in coconut oil prices in the coming week, sources said. Relying heavily on old and low production trees, Kerala's coconut production has been steadily declining over the years.
While the southern districts have been contributing insignificant quantities for copra conversion, Kerala has been depending increasingly on the Northern districts of Kannur, Kasargod, Kozhikode and Malappuram to meet its copra needs. And, even the production from the northern districts is proving insufficient to meet the State's needs.
Copra prices are also beginning to inch up. While buyers are quoting a price of Rs 5,200, the sellers are bidding at Rs 5,300 a quintal. Copra prices had gravitated to Rs 5,000 a quintal recently. Portraying a firm trend, coconut oil futures quoted Rs 7,700/quintal for January contracts. February contracts were up at Rs 7,900, while March contracts quoted at Rs 8,000.
Palm oil prices ruled at Rs 60.50 a kg while palm kernel oil fetched Rs 76.
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