Rising coconut oil prices since Onam has brought cheer to the farming community with rates crossing the ₹200 mark.
Traders said prices have continued to rise even after Muhurat trading on Diwali day when it was quoted at ₹196; it moved up further to ₹203 on Wednesday. Copra prices have also moved up simultaneously, reaching ₹132 per kg. The rates in Tamil Nadu are ₹183 and ₹135, respectively.
Thalath Mahmood, President of the Cochin Oil Merchants Association (COMA), said both coconut oil and copra prices have been moving up since Onam and the rising trend is likely to continue till mid-January, when the next harvest season begins. It was in 2017-18 and 2021-22 that coconut oil prices hit a high of ₹204 and ₹209 respectively, he said.
Ubais Ali of Mezhukkattil Mills attributed the surge to supply side weakness across growing regions worldwide. Usage of coconut as alternative products was on the rise and the supply was inadequate to meet the demand. The yield was down by around 50 per cent in growing countries due to climate change and drought-like conditions.
The industry’s concern over the proposed European Union Deforestation Regulations (EUDR) on crude palm oil and palm kernel oil seems to have helped coconut oil gain an edge in the market, due mainly to its use as a base material in surfactant manufacture, he said.,
KK Devraj, a consultant in the coconut oil industry, said the higher import duty for crude and refined vegetable oils has kept the prices of palmolein, sunflower oil, soya oil and other oils on the higher side. This is reflecting in coconut oil as well. However, farmers in Kerala have not derived any price advantage due to copra shortage.
The Kerala copra market generally experiences a lean supply season during the second half of the year. There are also reports of farmers and traders holding stock in anticipation of a further price rise. The export of raw coconuts, diversion to other value-added products, and the high demand for tender coconuts has also affected copra supply.
The Sabarimala pilgrimage season, which starts next week, will create further demand for coconuts. Overall, the market expects high prices to rule till the advent of the coconut season by late this year or early next year, he added.
Informed sources cited increased consumer acceptance of coconut for various other usages like coconut milk, grated coconut other than as a cooking medium, for perking up demand. Reports of coconut oil use in the cosmetic industry would also be beneficial.