Speculative buying has lifted coconut oil prices to record highs for the year both in Kerala and Tamil Nadu.The prices in Kerala touched Rs 90 for a kg (Rs 83), while they were ruling at Rs 85 a kg in Tamil Nadu (Rs 80). Simultaneously, copra prices surged to Rs 7,500 for a quintal (Rs 5,700) in Kerala and Rs 7,300 a quintal in Tamil Nadu (against Rs 5,600 quoted last week).

“This is purely a speculative market, which will soon witness corrections, especially in the absence of corporate buying,” Prakash B. Rao, President, Cochin Oil Merchants’ Association (COMA) said.

The market was also witnessing a copra shortage as the season ends in Kerala, he added.

However, other edible oils such as palm oil and palm kernel oil were quoting lower compared to last week’s levels at Rs 62 a kg and Rs 61 a kg respectively, he added.

Thalath Mahamood, Director, COMA described the upward trend in prices as ‘cyclical’, which may come down shortly in the absence of outside demand. The price hike would affect local demand for coconut oil and consumers may shift to other edible oils, which were currently available at lower prices.

Tamil Nadu traders are on a buying spree from neighbouring States due to the shortage of copra and raw coconuts in the markets, he said.

Attributing speculative buying for the sudden surge in prices, Bharat N. Khona, former Board Member, COMA, said upcountry buyers have started withdrawing from the market. They would wait for a correction.

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