Coconut oil market is witnessing a bearish trend both in Kerala and Tamil Nadu markets this week following the decline of demand from upcountry buyers.
Prakash B. Rao, Vice-President, Cochin Oil Merchants Association (COMA), pointed out that some of the stockists had started liquidating copra in the market that had resulted in the decline of both copra and coconut oil prices.
It is normal practice that some of the major traders used to stock copra ahead of season to fetch a better price in the lean period. This trend is now prevailing in the market, he said.
The coconut oil prices have come down to Rs 70/kg in the Kerala market (Rs 71) whereas it is ruling at Rs 67 per kg in Tamil Nadu (Rs 68.50).
Copra prices also declined to Rs 4,800 per quintal in Kerala (Rs 4,900) while it dropped to Rs 4,600 in Tamil Nadu (Rs 4,800).
Recovery seen post winter
Palm oil prices slightly increased to Rs 54 against Rs 53 per kg quoted last week and palm kernel oil prices are ruling at Rs 56 per kg against Rs 55.
Traders are expecting a price recovery in February once the winter season is over in the north Indian markets, he added.
According to Rao, the recent decision of the Government to allow exports of coconut oil through all major ports will not benefit the industry now. Of late, exports are carried out through many south Indian ports and this has not made any major impact in sales.
He also suggested increasing the minimum support price of milling copra to Rs 5,500 per quintal from the present Rs 5,100 for a better price recovery for coconut oil in the long term.
Thalath Mahamood, former President, COMA, said that the market is witnessing a declining trend due to various reasons, which included lower copra stock, procurement delay, staying away of corporates. This has resulted in low demand, both in local and upcountry markets.
He expressed the hope that the market is expected to revive once the copra procurement at new MSP rates commences.
Bharat N. Khona, former Board Member, COMA, said that the market is showing a weak trend due to low pricing of other edible oils. He was of the view that the sudden upward trend could not withstand for long and this may send wrong signal to upcountry buyers.