Coconut oil prices up on rising demand, supply crunch

Corporate entry to purchase copra at higher levels perked up coconut oil prices this week.

It is reported that a leading Mumbai-based company engaged in branded coconut oil has offered an increased price of ₹600 per quintal to copra.

This has pushed up prices of coconut oil, touching ₹11,200 per quintal in Kerala. Copra prices also increased to ₹7,800 per quintal from ₹7,500 last week. However, due to Pongal Holidays, coconut oil trading was not active in Tamil Nadu.

Besides corporate buying, prevailing drought conditions in Tamil Nadu also affected copra arrivals from various production centres. The supply crunch due to the raw material availability was another reason for the hike, Thalath Mahmood, President, Cochin Oil Merchants Association (COMA) said. The market, he said, is witnessing strong upcountry demand and there are reports that certain companies have increased copra intake to tide over supply shortage, at higher prices, to meet production requirements. In this emerging scenario, he said the market is likely to go up in the coming weeks.

However, the currency demonetisation and subsequent cash crunch made its impact on the farming community badly, as the transactions in the traditional coconut oil sector usually takes place through a cash-and-carry mode. Farmers are facing innumerable difficulties in making their payments for copra loads due to cash restrictions imposed by the banks.

Bharat Khona, former Board member, COMA, wondered whether these corporate companies that which made higher offer prices for copra may go for continuous buying . The surge in copra prices is evident in the loose oil market, which stood at ₹1,800 for 15 kg.

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