As winter is poised to set in over North India, the demand for coconut oil-based cosmetics and hair oils have begun to wane. Moreover with sumptuous rains reported from several parts of upper India, the summer demand for coconut oil based cosmetics and hair oil have not been as good as last year. Consequently, the industrial demand for coconut oil has begun to ebb and prices are likely to be impacted.

But there has already been a fairly significant shift away from coconut oil to palm kernel oil by the cosmetic industry, Mr Prakash B Rao, Member of the Cochin Oil Merchants Association (COMA) said. With coconut oil prices continuing to rule substantially higher than palm kernel oil prices, industries have not only found it far cheaper to use palm kernel oil but have also realised that it gave better conversion rates into soaps.

Coconut oil prices have eased to Rs 87 per kg in Kerala's wholesale markets and to Rs 82 in Tamil Nadu markets. After the Onam season, fresh demand for coconut oil by the state has eased and the flow of coconut oil from Tamil Nadu to Kerala has also fallen. Consequently the price differentials between Kerala and Tamil Nadu remains marked.

With Diwali festivities round the corner, fresh round of demand for edible copra is still to emerge from North India. Copra prices were ruling at Rs 58 in Kerala wholesale markets as against Rs 54 per kg in Tamil Nadu. The traders did not envisage any significant upsurge in copra prices due to increased demand for edible copra since demand was for small quantities of specific type of copra.

Signifying that coconut oil prices are not likely to surge up in the immediate future, futures prices were quoting at Rs 84 per kg, lower than the spot prices in Kerala. The October series was also quoting lower at Rs 86 per kg. Palm oil and palm kernel oil were proving increasingly competitive to coconut oil quoting at Rs 58 and Rs 72 respectively.

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