Coconut oil market to firm up on short supply

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Published: January 23, 2019 12:11:23 AM

The coconut oil market is likely to firm up this season due to short supply from key states like Kerala and Tamil Nadu. The impact of floods in Kerala and cyclone Gaja in the neighbouring Tamil Nadu is estimated to drag down supply, traders have stated.

Coconut oil market to firm up on short supply

The coconut oil market is likely to firm up this season due to short supply from key states like Kerala and Tamil Nadu. The impact of floods in Kerala and cyclone Gaja in the neighbouring Tamil Nadu is estimated to drag down supply, traders have stated.

Coconut oil is used in household cooking in states like Kerala and Goa. It is also used in the bakery, hair oil and soap manufacturing industry. Out of the total production, only 35% is utilised for copra and coconut oil production. India is the world’s biggest buyer of vegetable oil, importing nearly 60 % of its 16-17 million tonne annual consumption.

Domestic and Export Market Intelligence Cell of the Tamil Nadu Agricultural University stated in its latest report that the setback in coconut production due to cyclone Gaja and also the festive seasons in the forthcoming months will enhance the demand for coconut in the domestic market.

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“The market is tight and supply of copra is limited. It is likely to move up further in the days to come,” Talat Mehamod, member of the Coconut Oil Merchants Association (COMA) and trader at the terminal market of Kochi said. He added that supply from Tamil Nadu is on the lower side also due to the shortage of labourers taking a break for the festive season of Pongal.

“Demand is seen to be good and likely to support the market even as arrivals pick up in the coming months.The downside to the market might be the supply of extracted oil from imported coconut cake,” he added.

On Tuesday evening, coconut oil was was being quoted at Rs 18,600 per quintal in the Kochi market, according to COMA data. Coconut production has increased substantially in India in the last four years with increase seen in both productivity and area under cultivation, a report by the ministry of agriculture & farmers welfare states.

The report states that the country has become the leading producer of coconuts with productivity increasing to 11,516 fruits per hectare in 2017-18 as compared to 10,122 in 2013-14. Between 2014 and 2018, 13,117 hectare was brought under new plantation as compared to 9,561 hectare during 2010-2014.Other leading producers of coconut are Indonesia and Philippines.

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