Short supply and a sharp rise in demand have led to a moderate increase in prices of coconut oil in south India, especially Tamil Nadu.
The Kangayam market in Tamil Nadu quoted Rs 6,100 a quintal for the best quality oil, while the medium quality oil was at Rs 5,900. The Kerala market quoted Rs 6,000 a quintal. The price was Rs 5,800 a quintal couple of weeks back.
An year ago, the price in Kochi was Rs 4,700, said a retail trader. According to market sources, prices of oil and copra will rise further as demand for raw coconut, copra and coconut oil is swelling. But supply is weak due to poor production and it being offseason.
Thalath Mohamed, former president of the Coconut Oil Merchants Association (COMA), said supply from Tamil Nadu, the largest supplier in the country, had fallen 15 per cent since the last few weeks.
There is heavy demand for oils in the north due to the coming festival season. So, major coconut oil brands are stocking oil and copra. The supply would in no way match the rise in demand, said a market player. Due to it being offseason, production of both coconut and copra is low in Kerala. The heavy monsoon has also delayed drying of copra, whose next production season will start only in January.
It is also a lean season for coconut production and the next harvesting season begins in November. So, according to traders, the market would be tight for the next 8-10 weeks. They said it was likely that the market would cross the Rs 7,200-mark, the best price ever.
The prices of palm oil and other edible oils are also rising. Palm oil rose to Rs 5,200-5,300 a quintal, sunflower oil was at Rs 8,000-9,000 and gingelly oil was selling around Rs 12,000 a quintal.