Coconut oil, copra prices see short-term rally

The Coconut oil market is witnessing a spurt in prices, though market sources expect the trend to reverse by the middle of next month.

Very heavy rainfall in Tamil Nadu and Kerala has dented supply of copra and coconut oil to terminal markets, which is seen as the main cause for this sudden jump in prices. Current prices are around Rs 4,900 a quintal.

With this rise, demand has shifted from Tamil Nadu to Kerala. Traders said that the bullish trend might continue throughout December, but as sharp increase in production is estimated in Kerala and Tamil Nadu prices would nosedive after January 15.

It has been estimated that production would increase in Andhra Pradesh and Karnataka also and bumper crop is estimated during the main season (January "� April, 2005).

With sunny weather back, production of copra has became active in the northern Kerala and produce will be ready in January.

Traders said festival demand supported the priceline and household consumption is high due to Christmas and New year. As the pilgrimage season at Sabarimala is in full swing there is shortage for coconut in local markets and price has increased to Rs 6 "� 8 for a nut.

Copra from Sabarimala will hit the market in one week which in turn will increase supply in Kerala and Tamil Nadu markets, which will reverse the current rally in prices, market sources said, effectively ruling out a further rise in prices.

Traders said that Tamil Nadu dealers are offering coconut oil at Rs 4,500 a quintal and are ready to supply in Kerala at the rate of Rs 4,700 - 4,750, including transportation and taxes. In Kerala the copra production season begins in January and ends by May.