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Coconut oil prices have jumped up as corporate demand gained ground in major South Indian markets last week. As some of the major producing countries face shortages, reports indicate that the export of coconut and coconut oil has started once again from a few South Indian ports.
Coconut oil was quoting at Rs 105 a kg in both Kerala and Tamil Nadu markets. Copra prices meanwhile peaked to Rs 73 a kg. With their stocks depleted, big players like Marico, Shalimar and Kerafed have re-entered the market in a big way. While Marico and Shalimar are major players in the copra markets of Tamil Nadu with a smaller presence in Kerala, Kerafed is a major buyer from the Kerala market.
Exports to Sri Lanka, which were in vogue couple of months ago, have ceased, but it would seem that a fresh round of exports have commenced to countries like Bangladesh, Pakistan and the UAE, Mr Prakash B. Rao, Member of the Cochin Oil Merchants Association, said. These were countries which used to traditionally source their coconut requirements from Sri Lanka, but the crop failure in that country has forced them to look elsewhere.
As the price of coconut and coconut oil has not been arrested despite the onset of the peak production season in Tamil Nadu, some traders expressed apprehension whether the crop was as good as it was expected to be. Others pointed to poorer crops reported by some of the major producing countries like the Philippines, Indonesia, Thailand and Malaysia as the prime reason for the current price spiral. As Sri Lanka has banned exports, the Coconut Development Board sources expected coconut exports from the country to increase by 30 per cent in 2011-12 over last year.
Traders cited the case of coconut oil prices surging couple of months back on the back of crop failure in Sri Lanka, which triggered a spell of exports from some of the South Indian ports. Similarly, they said the current spell of price rise could be due to exports to Bangladesh, the UAE and Pakistan, which were earlier fed by exports from Sri Lanka. The global shortage is also fuelling prices.
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