Fall in palm oil prices in the international market has impacted coconut oil prices Kerala and Tamil Nadu this week.

Coconut oil prices in Kerala are now ruling at Rs 61.50 a kg (Rs 63) whereas in Tamil Nadu it dropped drastically to Rs 58 (Rs 60).

Prakash B. Rao, Vice-President, Cochin Oil Merchants Association (COMA), told Business Line that cheaper availability of palm oil and palm kernel oil, a close substitute of coconut oil being used for industrial purpose, has resulted in low demand from corporates and upcountry buyers.

He said that a majority of industrial buyers and even retail traders had shifted to palm oil, which is now cheaper than coconut oil.

Lower palm oil prices tend to put pressure on coconut oil prices as consumption shift to the lower priced oil, he said.

Palm oil prices are now trading at Rs 48/kg while palm kernel oil is at Rs 51.

Simultaneously, copra prices also dropped to Rs 4,450 a quintal in Kerala (Rs 4,600), while it was Rs 4,300 in Tamil Nadu against Rs 4,500 last week. The summer season demand for tender coconuts in Tamil Nadu and Kerala markets also affected copra arrivals, he added.

Thalath Mahamood, former President, COMA, said that a panic situation is prevailing in the market due to low demand.

Bharat N.Khona, former Board Member, COMA, attributed the cheap imports of other edible oils as the reason for this continuing price fall in coconut oil.

If the market stabilises at this lower rate, he said upcountry buyers and corporates may enter the market to purchase coconut oil.

sajeevkumar.v@thehindu.co.in

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