Comments
Contrary to market expectations, coconut oil prices have started climbing again. Despite the onset of the peak production season in Kerala, coconut oil prices have crossed the Rs 90 kg mark both in Kerala and Tamil Nadu and the traders are at a loss to explain the contradictory signals from the market.
Coconut oil prices climbed back to Rs 92 a kg in Kerala market while copra was quoting at Rs 61a kg. The principal driver for the price spurt was the firm trends in Tamil Nadu where the prices were quoting at Rs 94 kg for coconut oil and Rs 63 kg for copra. Although arrivals were low in the Tamil Nadu market before the onset of the peak production season, Mr Prakash B Rao, Member of the Cochin Oil Merchants Association (COMA) pointed out that there was no large scale demand either as big corporate buyers were keeping away.
Hoarding
As prices have turned bullish, traders have begun to stock up in anticipation of higher prices and there were hardly any sellers in the market, sources in the trade said. The price trends can turn either way in the coming weeks depending on the surge in arrivals in the Kerala market, they warned. What holds surprise to the traders is the fact that competing edible oil prices have cooled off since last week while coconut oil prices alone have surged. Palm oil prices have fallen to Rs 58 kg while palm kernel oil has eased to Rs 90 a kg. Market sources pointed out that it is just a question of time before coconut oil prices begin to ease.
They said that the markets will have to ease as arrivals from the peak production season sets in over Kerala. Moreover the big corporate companies are not coming in with bulk orders and instead they are keeping away from the market. These large companies are reported to have built up sufficient stocks and are not likely to enter the market in the short run. If the peak production season runs its course from Kerala, later to Tamil Nadu and finally to Karnataka in the coming months, there is only direction that the price trends can take — down, sources in the trade pointed out.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.