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Coconut oil prices continue to hover at new highs even though it is the peak coconut production season in Kerala. Coconut oil was quoting at Rs 95 a kg in Kerala markets. Indicating that the price spurt is likely to continue into the coming weeks, coconut oil prices in Tamil Nadu have bridged the gap quoting just a shade lower at Rs 94 a kg. Despite the onset of the peak production season, arrivals from Tamil Nadu are required to buttress Kerala's demand and douse the price spiral.
However market sources said arrivals into the Tamil Nadu markets have dried up kindling firm trend in prices. Mr Prakash B. Rao, member of the Cochin Oil Merchants Association, said even at the high price of Rs 95 a kg, there were no sellers in the Kerala markets, and instead there were only buyers. The sellers were quoting Rs 98 a kg for coconut oil.
Copra was quoting at Rs 68 a kg in Kerala markets and Rs 66 a kg in Tamil Nadu. The shortage in copra was evident across all South Indian markets. Market intermediaries like KERAFED, which procure copra to help farmers and avert major price falls during the peak season, have also run out of stock and are viewing the markets, sources said.
Big corporate players have revised the procurement price for copra to Rs 66 a kg from the Tamil Nadu market. Their huge demand is likely to absorb all arrivals, hardly leaving any stock to assuage the Kerala demand. As the prices continue to hold firm, there is hardly any industrial demand for coconut oil. But sources said they will have to re-enter the market sooner or later, as the summer months are round the corner and robust demand for coconut oil-based shampoos, hair oils and other cosmetics resurface in a big way.
Meanwhile, competing edible oils like palm oil and palm kernel oil have all been holding steady. Palm oil was quoting at Rs 58 a kg and palm kernel was ruling at Rs 95 a kg. However indications are that palm oil and soya bean oil are likely to remain firm in the coming weeks since their futures prices have been firming up in recent times, sources said. Traders were hoping that the onset of the peak coconut production season in Tamil Nadu from the middle of the month would douse the present price spiral.
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