Coconut oil prices are likely to gain in the festival season due to lower output of nuts, according to a study by the Tamil Nadu Agricultural University (TNAU). The prices have been lately under pressure due to sluggish demand and lower rates for competing oils.
India is among the leading coconut producers of the world with an annual production of more than 15-17 billion nuts. Four southern states together account for 90% of the total production in the country.
Production of coconuts is estimated to be lower by almost 30% in the current season and the price of coconut and copra are likely to increase after September, said the TNAU study. Another study conducted by the state-run coconut board reports that production is seen lower by almost 16% in Tamil Nadu, which in recent years has become the prominent trading center for oil.
Production in Karnataka is estimated to be lower by 12 % in the current season due to erratic weather. Coconut oil prices moved up in the recent days due to lower supply of copra . Oil prices at Thrissur on Friday stood at Rs 72.50 a kg and oil from Kangayam delivered at Thrissur stood at Rs 73.50.
Kerala is the main coconut growing state with an area of 10.20 lakh hectares and production of 5,911 million nuts, followed by Tamil Nadu (3.20 lakh hectares and 3716 million nuts), Karnataka (2.87 lakh hectares and 1493 million nuts) and Andhra Pradesh (0.95 lakh hectares and 780 million nuts).
Continuous supply of coconut oil from Tamil Nadu keeps the market under pressure as consumption at the household level is limited to Kerala and certain parts of southern Karnataka and Goa.
Industrial users tend to substitute coconut oil with palm and palm kernel oil when the price difference is above Rs 10 per kg. Kangayam, in TN, emerged as a major trading center of coconut oil in the ’80s with a spread of coconut cultivation in Tamil Nadu.
