Increasing consumption of tender coconut seems to have altered the dynamics of the coconut oil market with price remaining stable even in high production season. Usually, price of coconut oil declines with the start of the production season in Kerala (February) and reaches the end of the trough during June as production peaks in Tamil Nadu and Karnataka.
?Declining availability of copra in the Tamil Nadu market has helped in curbing the free-fall in price in times of high production. Demand for coconut oil has not increased substantially but the supply has been curbed due to the consumption of tender coconut,? M Thomas Mathew of the Coconut Development Board told FE. ?Conversion to copra has declined substantially in central Kerala and other parts of the state. Small traders who used to trade in copra have shut shop opting to sell tender coconut,? he said, adding, ?figures from Karnataka show that production of ball copra has been on a decline on year-to-year basis.? Coconut development board believes that inelastic demand for tender coconut due to its health benefits will help in stabilising the coconut oil market, which was, until recently, highly volatile.
The shortage in supply was accentuated with the rains in Tamil Nadu, where the copra is sun-dried and rains in those parts have slowed the conversion process, a trader said.
Thomas Mathew added that the global situation was also favourable to coconut farmers with supply shrinking due to lower production in Thailand and Sri Lanka. ?Global prices are also higher compared to the Indian prices discounting the possibility of imports by the industrial users,? he added.
