Coconut oil market has found support with traders stocking copra in anticipation of gains from government procurement. Copra procurement has been slow and has not picked up volumes even though the union government had announced procurement of copra through Nafed with immediate effect in March.
Traders have capitalised on the reports and have helped firming up the market of coconut oil.
Coconut Development Board (CDB) has decided to procure copra from Kerala and Tamil Nadu simultaneously at the revised price of R5,100 per quintal.
?The market has gained R200 per quintal due to the demand for copra. Traders are stocking copra as they feel that the market would rally when the government agencies step in,? Talat Mehamod, president of the Coconut Oil Merchants Association (Coma) and trader at the terminal market of Kochi, said. He feels that the market would firm up in the short-term due to lower availability of copra in the open market.
Futures at the counters of the First Commodities Exchange Of India (FCEI) also indicate an increase in price. As on Monday evening, coconut oil prices at the Thrissur market stood at R63 per kg. Palm oil was selling at R70-72 per kg.
T K Jose, chairman of Coconut Development Board told FE that the procurement has been slow so far and would gather speed in the coming days as supply of coconut increases in the southern states. Production season in Kerala starts from February while production Tamil Nadu and Karnataka starts a bit later in March and April. Usually price of coconut oil declines with start of production season in Kerala (February) and reaches the end of the trough during June as production peaks in Tamil Nadu and Karnataka.
Traders say that Indian production of coconuts for the current season would be better due to conducive weather. But globally there is lower supply of nuts due to shortage in Philippines.
Oil experts report that coconut oil production during 2011 would be lower by about 300,000 tonne. Indian import of edible oils are also expected to increase in the current oil year due to higher consumption and lower than estimated production of oil seeds. India is the world?s biggest buyer of vegetable oil, importing mainly palm oil from Indonesia and Malaysia and a small quantity of soya oil from Brazil and Argentina.
