Coconut oil market firmed up from lower levels this week following festival demand. A better corporate buying too had attributed for a rally in prices.
According to Prakash B.Rao, Vice-President, Cochin Oil Merchants Association (COMA), spot prices of coconut oil in Kerala were trading at Rs 56 per kg compared with Rs 54 in the previous week.
Simultaneously, the Tamil Nadu market too firmed up to Rs 54 a kg from Rs 52 last week.
Copra prices also firmed up by Rs 200 per quintal both in Kerala and Tamil Nadu to Rs 4,100 and Rs 3,900 per quintal, respectively.
He said traders have started stocking copra and coconut on expectations of further rally in prices in the coming days especially due to the commencement of North-East monsoon. Normally Tamil Nadu and Kerala receive reasonable rainfall during this period.
Besides, the reports of procurement of copra by Kerafed, Marketfed from Kerala, Tamil Nadu and Karnataka on behalf of Nafed have also helped the market to recover from lower levels.
These agencies reported to have procured 11,240 tonnes from Kerala, 20,690 tonnes from Tamil Nadu and 5,500 tonnes from Karnataka, he said.
Palm oil and palm kernel oil, which is a close substitute of coconut oil, is currently trading at Rs 54 per kg (Rs 51) and Rs 50 (Rs 47).
P.G.K. Koshy, President, COMA said that the market has slightly picked up following the festival demand and it is expected to continue.
Bharat N. Khona, former Board Member, COMA, pointed out that the unprecedented fluctuation in the market has rallied up the prices. Upcountry demand was low since the prices of other edible oils were trading low.
However, he said the sudden firming up of prices was unusual and not related to any fundamentals. He expects that the market may decline in the short-term.