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A serious shortage for coconuts, copra and oil pushed up the price of coconut oil sharply to Rs 8,600 a quintal in the Kerala market. The price was Rs 8,000 in Kochi just 10 days ago, but it rallied daily for the last one week.
Dealers told Business Standard the market was poised for a further increase in prices as the shortage for coconut and copra was obvious in Kerala and Tamil Nadu. In retail trading, coconut oil on Tuesday quoted at Rs 100 a kg and is likely to cross Rs 110 shortly. During the last 10 days, the market registered a steady increase of Rs 50-100 a kg on a daily basis.
Thalath Muhamed, a Kochi-based leading dealer and director of the Cochin Oil Merchants Association (COMA), said supply from Tamil Nadu was limited as production was lower due to off season. In Kerala also, coconut production is lower during the September-December period and this affected production of copra in major coconut drying centres. As the Onam festival season is over in Kerala, there is a slowdown in demand, but poor supply makes the market bullish, he added.
This cyclical increase is seen in coconut oil market during the September-December period. Till January, the market is likely to be on the uptrend due to restricted supply. Coconut production is rather active in Karnataka now and millers of Tamil Nadu depend mainly on supply from that state. Copra price is now moving in a range of Rs 6,000 -7,000 a quintal. Even at these tags, good quality copra is not available in the market.
The Kerala market is poised for a further increase in prices as dealers are reluctant to stock more oil at higher prices. In Kerala, refined palm oil is available at a price tag of Rs 75 a kg and a major chunk of household consumers shall switch over to palm oil. Whenever coconut oil price makes an upward trend, this ‘phenomenon’ is seen in Kerala. So, household demand will dry up if price goes up, said V V Antony, a leading retail dealer. Coconut price now increased to Rs 25 a kg, which was Rs 20 weeks back. Raju Kaitharath, a coconut dealer, said there was a serious shortage for coconut and the wholesale price increased to Rs 10 per nut.
Since this is a lean season in the case of production, the market is likely to go up, he added.
Thalath said supply of cheap coconut oil, which was blended with other low value oils, was weak now due to brisk inspection by the Food Safety Department. This was very active during the Onam season. The advent of blended coconut oil in the market was a main reason for the fall in the price of coconut oil. Now, cross-border trading of inferior coconut oil is limited due to strict measures adopted by the Food Safety Department.
