Coconut oil drips thin on poor demand

Price expected to fall to Rs 5,500 per quintal.

Coconut and copra prices in Kochi are likely to stay in a narrow band in the week ahead due to thin demand, dealers said today. Coconut oil price may stay in the range of Rs 5,800-5,900 per 100 kg while copra, dry coconut used for extracting oil, is likely to move around 4,000-4,100 rupees, they said.

Tight supply due to off-season in growing areas of Kerala helped to check sharp fall in coconut oil price despite weak demand, dealers said. “Supply is likely to improve by Jan-Feb when peak season of fresh crop supply picks up,” said N Pushparaj, a coconut oil trader based in Kozhikode.

Arrival of coconut oil from Tamil Nadu also slowed down due north-east monsoon rains in coconut growing areas of the state, he added. Sellers in Tamil Nadu were offering coconut oil at 5,700 rupees per 100 kg while copra price stayed around Rs 3,800, he added.

Some dealers, however, are not ruling out chances of the commodity slipping to Rs 5,500 per 100 kg due to weak demand and lower price of palm oil.

Palm oil currently enjoys a huge price advantage of aro-und Rs 2,700 per 100 kg over coconut oil, a dealer said.

Price of refined, bleached and deodorised palm oil came down to Rs 3,260 per 100 kg in Kochi compared with Rs 3,600 a week ago, he added.

Demand for coconut oil, especially from small and medium enterprises, will decline sharply when such huge gap exists between prices of the two, he said.

If central government re-imposes import duty on palm oil, the fortunes of coconut oil may brighten, he added.

The Solvent Extractors’ Association of India, an apex body of vegetable oil industry and trade, had requested union government to impose at least 30 per cent duty on import of crude palm oil and 37% on refined, bleached and deodorised palm oil.

The government had withdrawn import duty on crude edible oil imports and slashed duty to 7.5% for refined edible oil imports earlier this year to check price rise and control inflation.

In spot counter of Cochin Oil Merchants Association coconut oil price has slipped to 5,955 rupees per 100 kg from 6,000 rupees a week ago, dealers said.

Copra price stayed flat at 4,125 rupees per 100 kg, they said. Around 14 tn of coconut oil and 6 tn of copra were sold during last week at spot counter of COMA, dealers said.