Coconut oil market continues to slide for the second consecutive week in Kerala due to sufficient availability of substitute oils in the market.
In Kerala, the prices have come down to Rs 59 per kg from Rs 60.50 quoted last week, while in Tamil Nadu, the rates stood at Rs 55 against last week’s Rs 55.50 per kg.
Palm oil prices have also shown a decline of Rs 57 per kg (Rs 58), whereas palm kernel oil stood at Rs 54 (Rs 57 per kg).
Prakash B. Rao, President, Coconut Oil Merchants Association (COMA), said that lot of stocks of palm oil and palm kernel oil are now available with large-scale importers and this has resulted in the price fall of coconut oil.
It is estimated that around 10,000 tonnes of palm kernel oil and 20,000 tonnes of palm oil are now available with wholesale importers, he said.
Historically, it has been seen that the coconut oil market is directly related to the substitute palm kernel oil and palm oil.
However, industrial buyers especially soap manufacturers have shown some interest in buying coconut oil at this price level. Copra prices have also come down to Rs 4,000 per quintal in Kerala (Rs 4,150) and in Tamil Nadu, the prices stood at Rs 3,750 (Rs 3,900), he said.
Thalath Mahamood, President, COMA, attributed the decline in prices to the government policy on procurement. Government agencies are procuring only limited quantity of copra at minimum support price.
The quantity so far procured is negligible to impact the market. The agencies should have procured at least one lakh tonnes to stabilise the market. He also warned that the agencies’ move to sell procured copra in the open market would have a negative impact.
Bharat N. Khona, former Board Member, COMA, said that the market is going down because of a steep fall in Malaysian palm kernel oil market. At the same time, the other oil markets are also going down.
Corporates and upcountry buyers are watching the situation and he hoped that they may enter once the market stabilises.