Coconut oil prices in Kerala and Tamil Nadu witnessed a declining trend this week due to availability of other edible oils at lower prices.
According to Prakash B.Rao, Vice-President, Cochin Oil Merchants' Association (COMA), most of the industrial buyers have shifted to palm kernel oil due to the huge price gap compared to coconut oil.
He said that palm oil and palm kernel oil prices were ruling at Rs 58 per kg and Rs 52 per kg, respectively against last week’s prices of Rs 61 and Rs 54.
Besides, large-scale imports of crude palm oil in bulk from Malaysia and news of reducing export duty in that country have also led to a price fall in coconut oil. There may be a possibility of a further decline in prices in the short-term, he said.
Meanwhile, coconut oil prices in Kerala were ruling at Rs 60 per kg (Rs 62) and Rs 58 in Tamil Nadu (Rs 60). Copra prices stood at Rs 4,200 per quintal in Kerala (Rs 4,300) and Rs 4,100 in Tamil Nadu (Rs 4,200).
Thalath Mahamood, former President, COMA, said that absence of a local demand and cheaper availability of other edible oils have affected the market sentiment in Kerala.
Traders have also lost interest in the ensuing Diwali festival demand. Moreover, there has been a selling pressure in Tamil Nadu due to a change in weather conditions and this has lead to a price fall, he said.
Bharat N. Khona, former Board Member, COMA, said of late the market is sliding down and it may go down further due to lower prices of other substitute oils. North Indian buyers are also reluctant to purchase coconut oil at this higher price levels, he said.