With the falling trend in coconut oil prices, buyers have stepped back and arrivals have surged in Tamil Nadu market. Corporate buyers are quoting lower prices and sellers seem to be falling in line. Exports have eased and are now confined mainly to Bangladesh.

With production in Tamil Nadu having been good this year, arrivals continue to be good. While growers had been flooding the market with coconuts in the recent past, conversion to copra has commenced in earnest and coconut oil arrivals have also begun to look up. Like in every falling market, buyers are keeping to the sidelines and are adopting a wait and watch approach, sources in the trade said.

Coconut oil was quoting at Rs 98 in Kerala, while in Tamil Nadu the prices were Rs 94 a kg. With the marked price difference, the flow of coconut oil to Kerala is expected to strengthen in the coming days. Copra prices have also dipped to Rs 65 in Kerala against Rs 64 in Tamil Nadu, Mr Prakash B Rao, Member of the Cochin Oil Merchants Association (COMA), said.

Palm oil prices have slumped to Rs 58 a kg while palm kernel oil quoted Rs 85. The downtrend in coconut oil prices is expected to continue especially since palm kernel oil prices have dipped to Rs 85, after having scaled over Rs 110 a kg in recent months, sources in the trade said.

Palm kernel oil is the ideal substitute to coconut oil and its prices would have an overbearing influence on coconut oil, they added. Also, reports indicate that coconut prices have corrected in the international markets.

But the fact that the peak production season in major producing States- Kerala and Tamil Nadu – is getting over would result in falling output during the next six months. So after the initial correction, the prices are expected to stabilise at lower levels.

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