Price of coconut products like coconut oil and copra have been rising for weeks. Coconut oil prices have breached record levels to touch Rs 86 a kg in the South. A combination of factors including renewed buying interest from corporate companies, unavailability of copra in local markets, new found demand for edible copra in North India and firm trends in the price of palm oil and palm kernel oil took coconut oil to new highs, according to industry sources.
The immediate trigger for the price spurt seems to have come from Indian manufacturers and exporters , notably, bulk corporate buying which immediately exhausted the stock of copra available in the market. Coconut oil which was quoting at around Rs 81 a kg in December jumped to Rs 86. The demand from companies that manufacture coconut oil-based shampoo, hair oil and cosmetics was around 300-400 tonnes. Speculative trade came to the fore when the < ahref='http://suppliers.infobanc.com/directory/coconut-fresh-dessicated-coconut-shell/S-1087/index.htm' target='_blank'>stock of copra available in the market was depleted.
The trend is expected to continue and traders see possibility of prices touching all time high level of Rs 90 a kg in the weeks ahead. Support has also come from the high price of competing edible oils such as palm kernel oil and palm oil that have risen to Rs 88 a kg and Rs 56 a kg.
The reported damage to the oil palm crop in Malaysia due to incessant rains is acting as a trigger for the price rise in palm oil and palm kernel oil.
The revival in demand for edible copra from North Indian markets has enabled prices to rise further. Conceding that bulk industrial demand was the primary trigger for the current price rise trade sources said that this huge industrial demand was unexpected during the lean production period.
Coconut oil production is expected to reach its peak in South India only from January-end or middle of February. There is insufficient stock available to cater to large industrial demand in the current period. Given the delicate demand-supply balance in the coming weeks, trade sources said the prices are likely to remain firm.
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