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| Coconut oil prices move upward on supply constraint |
| George Joseph / Kochi Jan 30, 2009, 00:12 IST |
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An increase in supply has pulled down the price of coconut oil to Rs 5,600 a quintal during last week, but the fresh week opened with a promising note at Rs 5,700.
The copra production season has begun in Kerala, but not picked up sharply in all the major producing centers. So there is heavy resistance from producers of both the oil and copra to sell at lower price tags. According to growers the season would be active throughout Kerala only by mid of February.
So there might not be a possibility for decreasing the price below Rs 5,600 level at least for the time being. Copra production is active in the coastal belt of the state, but shortage of coconut is badly hitting the production.
There is heavy demand for coconut in Kerala and from neighboring states like Karnataka. So growers prefer to sell coconut at a price tag of Rs 6-7 per nut. This makes the availability of coconut for producing copra difficult, according to producers.
Coconut oil dealers told Business Standard that the price had come down because of the heavy supply from Tamilnadu at lower price. Tamilandu offers delivery of coconut oil at a price level of Rs 5.500 per quintal.
The Kochi oil market quoted Rs 5,900 on 8th of this month and touched the lowest of Rs 5600 in last week. The market had been above Rs 6,000 during December, 2008. Since the supply of good quality copra is yet to pick up in Kerala this fetches a price tag of Rs 4,100, a quintal.
Low price of palm oil will be posing a serious threat to coconut oil business, once the season is active by next month. Palm oil is available throughout the state at a wholesale price tag of Rs 3,400 per quintal. Once the supply of coconut oil enhances and price of palm oil is in lower range, there is every likelihood for a plummeting of price in coconut oil market.
Market sources project a price below Rs 5,000 towards the end of February. The only factor that provides relief to copra producers and coconut oil traders is shortage in coconut production in this season. Lack of proper attention to coconut trees, decrease in acreage and various deceases have severely affected coconut production in the state during last few years.
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