Poor Demand Hits Coconut Oil Trading

Coconut oil trading has virtually stopped in the last two months because of low demand realisation according to the oil trading community here. The Coconut Oil Merchant's Association (COMA) is quoting the rates for copra, coconut oil and copra cake only on alternate days. During this month, trading has taken place only on two days.

The last trading took place on Wednesday and the price tag was Rs 3,150 per quintal for coconut oil. Only 50 quintals were traded on that day.

Traders told Business Standard that there was no effective demand from industrial users because of the large-scale supply by NAFED at the market rate.

 

NAFED, which was the nodal agency for procuring copra last year, is supplying coconut oil to reduce the huge loss incurred in procuring copra. In Tamil Nadu, the producing season is active at present. Hence industrial consumers can get as much quantity as required at their producing centre.

Palmolein is the main threat to coconut oil which is widely used as a cooking oil. Up to mid July, the price of palmolein was below that of coconut oil and this was the main attraction of palmolein as a cooking medium. But currently, the reverse is happening.

While coconut oil is being sold in the retail market at Rs 35 per kg, the price of palmolein is Rs 38 per kg. But this has not provided any advantage to coconut oil since palmolein has captured prominence in the market.

Even the Onam festival market has not able to ensure a good demand for coconut oil.

Upto December, it is the off-season for coconut oil production in Kerala. But even in the off-season market, the price level is plummeting.

Kerala, the traditional coconut oil market, is loosing its prominence in the national market. Both central and state governments had not taken initiatives to procure copra during this year. Even though this is a futile exercise, this would have made a psychological impact in the market.