Coconut oil prices continued their upward trend in the last few consecutive weeks both in Kerala and Tamil Nadu.
The prices touched an all-time high of Rs 112 per kg in Kerala (Rs 105), while in Tamil Nadu, the prices were quoting Rs 109 a kg (Rs 99) on tight supply and offseason.
According to Prakash B.Rao, President, Cochin Oil Merchants Association (COMA), copra prices also firmed up to Rs 83 a kg (Rs 76) in Kerala and the prices were ruling at Rs 80 a kg in Tamil Nadu against Rs 73 quoted last week.
He pointed out that acute copra shortage has affected the availability of the commodity, which has forced major corporates to go for bargain-hunting. This has resulted in the strengthening of prices.
Even though the domestic consumption of coconut oil in Kerala has come down, the demand from corporates has pulled up the prices.
The consumption of coconut oil in Kerala is estimated in the range of 1.5 to 2 lakh tonnes per year whereas palm oil is in the range of 3 to 3.5 lakh tonnes per year.
Sabarimala season
Prices are likely to remain more or less steady in the coming days, he said, adding that the ensuing Sabarimala season is likely to witness a price rally due to the demand for raw coconut.
Trading sources said that one cannot rule out the possibility of adulteration of coconut oil with other substitutes at these high prices.
Though the palm oil prices were ruling at Rs 65 a kg quoted at the same level last week, palm kernel oil touched a high of Rs 85 (Rs 72).
Tight supply, selling pressure
Thalath Mahmood, Director, COMA, said that the market is witnessing a steady trend with tight supply and absence of a firm selling pressure.
He attributed the price hike to offseason, copra shortage and export of raw coconuts to Pakistan from Tamil Nadu. This would expect to continue till the starting of the season in March-April.
Adulterated coconut oil
He also warned that the shooting up of prices may lead to flooding of adulterated coconut oil in the Kerala market from Tamil Nadu which was under control following strict monitoring by food safety officials at the border check posts.
Bharat N.Khona, former Board Member, COMA, was of the view that the high prices has dampened the local as well as upcountry demand for coconut oil and this would result in consumers shifting to other edible oils.