The revised minimum support price on copra did not impact the coconut oil market either in Kerala or Tamil Nadu this week.
Prakash B. Rao, Vice-President, Cochin Oil Merchants’ Association (COMA), said as against industry expectations for an increase of Rs 500 per quintal on MSP, the Government effected an increase of just Rs 150 per quintal.
The market reversed soon after the announcement, with prices declining in the last four consecutive trading sessions. The industry was hoping for a much better MSP to realise higher price recovery on coconut oil in the long term.
The industry has urged the Government to further increase the MSP to hold the downtrend in copra, coconut and coconut oil, Rao said.
The market is witnessing a selling trend and coconut oil is currently trading at Rs 67 per kg in Kerala (Rs 70) and Rs 64 in Tamil Nadu (Rs 67). Simultaneously, copra prices declined to Rs 4,700 per quintal (Rs 4,800) in Kerala and Rs 4,500 in Tamil Nadu (Rs 4,600).
He attributed the declining prices to panic selling by operators who hold huge quantities of copra. Reports of unwinding of stocks from Andhra and Karnataka in the Tamil Nadu terminal markets would also result in panic selling, Rao said.
Palm oil prices also witnessed a drop, quoting Rs 52 per kg (Rs 54), while palm kernel oil was at Rs 53 against Rs 56 quoted last week. .
Thalath Mahamood, former President, COMA said the market was witnessing a selling trend due to the absence of local and outside demand. The season had already started in Kerala and it would further improve by March, resulting in additional copra arrivals.
He also suggested that the Government make effective the copra procurement scheme to stabilise the market.
Bharat N. Khona, former board member, COMA, said there was no support from upcountry buyers and corporates in the last few weeks. This was due to the low pricing of other edible oils still available in the market.
Senior officials in the Coconut Development Board said there was only a minimum hike in the support price for milling copra at about 2.94 per cent, and for ball copra at 2.80 per cent.
Under the circumstances, the Coconut Development Board was trying its best to increase the price of value-added coconut products and coconut oil.