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Contrary to expectations and much to the consternation of the trading community, coconut oil prices continue to rule high in Kerala and Tamil Nadu markets. Unseasonal evening rain in coconut producing areas of Kerala and Tamil Nadu have arrested the harvesting and conversion operations, sources in the trade said.
This is more the case among farmers of Tamil Nadu who have large holdings under coconut trees. These large farmers are waiting for the rains to cease before harvesting their crop and converting their coconut into copra and later to coconut oil, Mr Prakash B. Rao, Member of the Cochin Oil Merchants' Association said. Steady sunshine and warm conditions are essential for converting coconut into copra.
Reflecting poor arrivals, coconut oil prices have converged in Tamil Nadu and Kerala markets to Rs 98 a kg. Copra prices in the two States are again uniform at Rs 65 a kg. The firm trends in the coconut oil markets are also reflected in palm oil prices which held steady at Rs 58 a r kg while palm kernel quoted at Rs 95.
Several north Indian buyers are running low on coconut oil stocks and are waiting for the price to ease before entering the market. Whenever there is fair amount of arrivals the north Indian traders resort to buying enabling prices to maintain the current highs, Mr Bharat Kona, a coconut oil trader said. However, he also said that the unseasonal rains are unlikely to continue indefinitely.
When the rains cease, the arrivals, mainly from Tamil Nadu are expected to pick up in the coming weeks leading to greater availability in the market and easing prices. There is also some amount of speculative activity in the markets. With hardly any trade happening in markets like Kochi during the past couple of days, how can the prices maintain a steady increase, some of the traders asked?
The coconut crop in Tamil Nadu and Kerala this season is reportedly good and there should not be any shortage during the current season. It is just a matter of time before the unseasonal rains abate and the crop arrivals commence into the southern markets, trade sources said.
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