Coconut prices may continue to remain subdued at least for the next three months due to the widening gap between stagnant demand and higher availability.

This is one of the main findings of a study by the Agricultural Market Intelligence Centre of the Kerala Agricultural University based on an econometric analysis of monthly price of the commodity combined with market survey with stakeholders.

Explaining the findings of the study report, Dr Satheesh Babu, Professor, Agriculture Market Intelligence Centre, KAU, said that the prices of coconut have been on the decline during the first half of the new season that commenced from January.

This has added to the worries of more than 10 million people, who depend upon the crop for their livelihood.

It may be noted that Kerala, Tamil Nadu and Karnataka together account for almost 84 per cent of area and production.

Hence, the price trend of this commodity is of strategic importance since it has a direct bearing on the livelihood of the vast majority of coconut growers in Kerala, most of them small growers.

Many of them are holding back their crop inventory in anticipation of better prices in August on account of the festival demand due to Onam, the study says.

The study, he said, is based on current market sentiments such as glut due to the economic slowdown in the Euro Zone, less demand for lauric oils for bio-diesel industry, global price signals for palm oil, 15-20 per cent higher production of coconut in Kerala, Karnataka and Tamil Nadu during the current season, and higher import of vegetable oils during the first eight months of the current oil year from November 2011 to October 2012. 

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