Coconut oil, copra steady on dropping palm oil prices

A steep fall in the price of palm oil coupled with distribution at subsidised rate through the PDS have arrested the surge in the price of coconut oil and copra.

Price of coconut oil have stabilised at Rs 6,500 a quintal for the last couple of weeks and according to the leading traders, the market is currently in a depreciating mode.

Palm oil is available in local wholesale market at a price tag of Rs 48 a kg and the retail price is in the range of Rs 50-55 a kg. Couple of months back, both the coconut oil and the palm oil had almost same price tags (above Rs 60 a kg), which resulted in a steep rise in the demand for coconut oil.

But large scale supply of palm oil at lower tariff had badly affected the demand for coconut oil during Onam season in Kerala, hence the market quoted a steady price tag. The one and only factor arresting a sharp price increase in coconut oil and copra markets is the heavy drop in the price of palm oil.

Kerala is currently having an acute shortage of coconut and copra due to lean production season of coconut. Processing of copra is not at all active in the southern districts of the state, but active only in Kasargod, Kozhikode and Malappuram districts. So, shortage of copra is so severe as the price of good quality copra has peaked to Rs 4,500 a quintal during Onam season.

The production season has ended in low stock in Tamil Nadu, the major producing state in the country. The stock in Karnataka is also low. Tamil Nadu is quoting a price tag of Rs 6,100 –6,200 a quintal for coconut oil and Rs 4,150 a quintal for copra.

At present, the Kerala market, especially the retail market is mainly depending on Tamil Nadu for both copra and coconut oil. According to leading Kochi-based traders, the stability in prices would continue for a week or two, then the market is poised for a drop, though in a narrow range.

The market is expected to drop by Rs 100 a quintal due to the advent of palm oil.