Coconut oil prices at all-time high

Prices to likely ease only by March when supply from TN picks up

Coconut, coconut oil and copra prices have risen through the last 8-10 weeks, amid a supply crunch in Kerala and Tamil Nadu. On Monday, the Cochin Oil Merchants Association (Coma) quoted a record price of Rs 12,200/quintal in wholesale trading, while the retail market saw an all-time high of Rs 130/kg. In Tamil Nadu’s Kangayam market, the largest coconut oil market in India, the commodity was quoted at Rs 12,000 a quintal on Monday.

It is expected prices will rise further till the end of March, owing to the substantial fall in coconut supply due to dry weather conditions. The price trend is likely to reverse once production picks up in Tamil Nadu, the largest coconut oil producer in the country. Through the past four weeks, coconut oil prices have increased 15 per cent. Copra prices rose to Rs 9,000 a quintal, and coconut prices to Rs 15-20 a nut, against Rs 7-8 a nut in November-December 2013. Coma Director Thalath Muhamed said slow coconut production and a dearth of climbers had led to a supply crunch in all major production centres of Kerala. C D Joseph, a farmer, said production was slow in winters.

In the December 2013-January 2014 period, coconut production fell 50 per cent in major centres in Kerala’s Malabar region, he said, adding adulteration of coconut oil was adding to woes. A substantial portion of the oil sold in Kerala’s retail market was mixed with cheap palm kernel oil, a common practice when the price exceeded Rs 100 a kg.

Joseph said production in the northern Malabar region would pick up by next month, but prices were likely to fall only by March-end, when Tamil Nadu was active in the market. There was good demand in the market, especially from industrial users such as Marico, he added.

Meanwhile, demand for palm oil increased in past month, following a fall in prices. In wholesale trade, palm oil is being quoted at Rs 6,250-6,300/quintal. TD Reejan, a trader, said there was a shift in demand for palm oil, especially from household consumers and local banana chips producers. He added the price of palm oil would also rise, in line with coconut oil prices.