Coconut oil prices are on the upswing with increasing substitution due to soaring prices of other edible oil, traders said. Reports of huge demand for refined coconut oil from Tamil Nadu market have created firmness in the market.
Coconut oil prices have seen sustained rally in the past few weeks with prices crossing the Rs 58 per kg mark few times, Talat Mehamod, a trader at the terminal market of Kochi told FE. Traders expect the market to stay firm in the short-term.
Interestingly, coconut oil is currently the cheapest edible oil in the market but has seen prices go up by 25-30% in one year, Talat said. Currently coconut oil is retailing at Rs 57-59 per kg in the Kochi market while the substitute palm oil is selling above Rs 65 per kg, he adds.
Copra prices have also gone up at Kangayam, a prominent centre of trade in Tamil Nadu with large business houses from Mumbai procuring huge quantities, Talat said. “Copra prices in Kangayam have risen to Rs 4,100 per quintal from Rs 3, 300 per quintal,” he added. The rally has seen farmers holding on to copra creating an artificial shortage, Bharat Khona, a trader at the Kochi market said.
Previously the huge supply base in Tamil Nadu used to have a depressing effect on the coconut oil market in Kerala as it is the only state to consume the oil for edible purpose. Traders see some substitution in the composition of vanaspati oil with other edible oils staying above Rs 70 per kg. Some poorer households in other states like Tamil Nadu could also shift temporarily to coconut oil with prices of gingelly oil staying high, Talat added.