The decision of a leading copra buyer to quote a lower price for procurement in the open market triggered a panic in the coconut oil market this week.
Prakash B. Rao, President, Cochin Oil Merchants Association (COMA), told Business Line that the corporate firm, an aggressive buyer, lowered the buying price by Rs 2/kg. The company quoted its procurement price at Rs 41.50 a kg against Rs 43.50 last week and this impacted market sentiments, he said.
According to Rao, the coconut oil market crashed to a new low due to weak sentiments in edible oils market as a whole. The price touched a new low of Rs 51.50 (Rs 55) and copra at Rs 3,700 a quintal (Rs 3,750).Prices in Kerala, dropped to Rs 57/kg (Rs 59) and copra prices to Rs 3,900/quintal (Rs 4,000).Sentiments for short-term are weak. Major corporates have reduced their intake in anticipation of a further drop in prices, he said.Edible oils are also ruling at a two-year low on account of better production in Malaysian markets. Currently, palm oil prices are ruling at Rs 54 (Rs 57), while palm kernel oil is trading at Rs 52/kg (Rs 54).
P.G.K. Koshy, President, COMA, said that shifting from coconut oil to other cheaper edible oils by soap manufacturing companies has resulted in coconut oil prices dropping. Besides, piling up of stocks with major importers of edible oils in the country had also created lower demand for coconut oil.
Bharat N. Khona, former Board Member, COMA, said that market is sliding on a daily basis due to weak sentiments. Lower prices of other edible oils have also impacted the coconut oil market.
sajeevkumar.v@thehindu.co.in