Coconut oil prices are again moving up due to supply concerns from Tamil Nadu and global cues. Arrival pressure from the neighboring state of Tamil Nadu has declined with labour shortage reported due to festivals and local body elections in the state. With prices of competing palm and palm kernel oil also moving up, traders expect the coconut oil market to firm up in the coming days.
Prices in the Kochi market have moved up to touch R81 per kg as on Wednesday evening. Coconut oil from Kangayam, Tamil Nadu delivered at Kochi market was quoted as R82 per kg. Coconut oil prices touched record high of R105 per kg during May. ?The market is likely to remain steady and move up as demand increases. Supply from Tamil Nadu is not seen depressing the Kerala market as seen in normal times,? Talat Mehamod, president of the Coconut Oil Merchants Association (COMA) and trader at the terminal market of Kochi, said. ?The market will remain firm for some days. We expect the prices to ease only after some days after Diwali as workers return to the farms in Tamil Nadu. Most of the migrant workers have gone home for Diwali and the workers in the state are not reporting to work due to the local body elections,? he added.
The annual pilgrimage to Sabari Mala is also expected to add pressure, he added. Global cues also support a firmer coconut oil market due to shortage in Philippines. Oil experts report that coconut oil production during 2011 would be lower by about 3,00,000 tonne. ?Prices of substitute palm oil and palm kernel oil are on the higher side and supporting the coconut oil market,? Talat said.