Coconut oil manufacturers are doubtful about a rally in prices, at least in the short term, at a time when rival edible oils are moving high. The excess production in the growing regions for the fall, thanks to good climatic conditions in the last two harvest seasons. The industry people expect the current harvest also to be a good one, which would put additional pressure on prices.
Copra rates have decreased by ₹10-12 per kg in the last week and are at ₹82 per kg in both the Kerala and Tamil Nadu markets currently. At the same time, coconut oil prices have decreased to ₹140 in Kerala, and to to ₹123 in Tamil Nadu on surplus production and availability of copra at cheaper rates. Demand for value added products in the overseas market has also been slow and prices were likely to go up only on a surge in global demand.
The shift from coconut oil to sun flower oil has taken place among the younger generation on health grounds. This category falls in the middle or upper middle income category. Therefore, reverse migration in the group is unlikely, despite the price difference, said, KK Devraj, a business consultant.
Further, the palm oil consuming sector is the hotel, restaurant and catering segment and the low income group. They will shift to coconut oil at lower prices. But the availability of cheaper oil from Tamil Nadu will give farmers there a price advantage, and not in Kerala, he added.