Coconut oil prices stay firm due to copra shortage

Written by Rajesh Ravi | Kochi, Apr 29 | Updated: Apr 30 2008, 06:12am hrs
With the supply of copra falling shortm, and demand on the rise, coconut oil market is staying firm in the peak production season, traders said. Usually, the price of coconut oil declines with start of production season in Kerala (in March) and reaches the end of the trough during June as production peaks in Tamil Nadu and Karnataka. Short supply and decline in quality of copra due to untimely rains is said to be a major reason for the firming up of the market. However, the Coconut Development Board estimated that the demand-supply dynamics to have changed with increasing demand for tender coconut.

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, M Thomas Mathew, Coconut Development Board, told FE. Figures from Karnataka show that production of ball copra has been on the decline on a year-to-year basis, he said. The shortage in supply was accentuated with the rains in Tamil Nadu, a major supplier of copra in the past few years. Meanwhile, consumption of coconut oil has been increasing, even though marginally, with hotels, bakeries and caterers using it, Mathew said. Retail price of palm oil has risen in the past few years and availability has been curtailed to a smaller extent, he added.