Coconut oil prices touch a new high

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As supply tightens in Kerala and Tamil Nadu owing to lesser production, coconut oil prices have touched new heights and are expected to remain firm until February, traders said. Prices at the terminal market of Kochi has touched Rs 54 per kg as supply lines from Tamil Nadu has dried up, Talat Mehamod, a trader at Kochi said. Coconut oil prices have firmed up by more than 20% in six months, he said. Interestingly, the price difference with the substitute palm oil has narrowed down to less than Rs 3-4 per kg.

In Kerala, the season starts by mid-February and in Tamil Nadu, the supply situation eases by April, Talat said. Prices could ease by then but the traders do not see it slumping to the 2007 low of Rs 40-44. Firming up of palm oil prices have made small substitutions, which may hold if the coconut oil prices stay below a certain range, he said.