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Coconut oil market firmed up this week following festival demand. Emergence of corporate buying also contributed to the rally.
According to Prakash B. Rao, Vice-President, Cochin Oil Merchants Association (COMA), spot prices of coconut oil in Kerala remained at Rs 56/kg compared to Rs 54 in the previous week. Simultaneously, in Tamil Nadu prices firmed up to Rs 54 from Rs 52 last week.
Copra prices firmed up by Rs 200/quintal both in Kerala and Tamil Nadu, with the commodity being traded at Rs 4,100 and Rs 3,900 respectively.
He said traders have started stocking copra and coconut on expectation of further rally in prices in the coming days especially on the commencement of North-East Monsoon.
Normally, Tamil Nadu and Kerala receive reasonable rainfall during this period.
Besides, the reports of procurement of copra by Kerafed, Marketfed from Kerala, Tamil Nadu and Karnataka on behalf of Nafed, have also helped the market to recover from lower levels.
These agencies are reported to have procured 11,240 tonnes from Kerala, 20,690 tonnes from Tamil Nadu and 5,500 tonnes from Karnataka, respectively.
The palm oil and palm kernel oil, which is a substitute of coconut oil, is currently trading at Rs 54/kg (Rs 51) and Rs 50 (Rs 47).
P.G.K. Koshy, President, COMA, said that the market has slightly picked up following the festival demand and it is expected to continue.
Bharat N. Khona, former Board Member, COMA, said that the upcountry demand was low since prices of other edible oils are trading at lower levels.
The sudden firming up of prices is unusual and not related to any fundamentals. He expects that the market may decline in the short term.
When contacted, T.K. Jose, Chairman, Coconut Development Board, said that this not a steady track of upward movement.
However, the prices will move up within a few months because of delayed monsoon and drought-like situation which awaits a drop in production.
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