Unusual rain in the southern parts of Tamil Nadu has brought good news to the coconut oil market despite sluggish demand. Supply of copra is lower than normal from Tamil Nadu and it is helping the market, traders said. Supply of copra and oil from Kerala is almost nil due to heavy rain. Traders estimate coconut oil prices to decline as supply resumes from the neighboring states. Lower prices for competing oils is also likely to aid in the decline. India is the world’s biggest buyer of vegetable oil, importing nearly 60 % of its 16-17 million tonne annual consumption. ?Drying of copra is hampered in southern Tami Nadu from where most of the oil and copra is supplied in the domestic market. If the rain persists for some more days, the market could firm up as conversion to oil would be limited,? Talat Mehamod, member of the Coconut Oil Merchants Association said.
Price of competing oils is also on the lower side, Mehamod said. Palm oil is quoted Rs 52 per kg in the Kochi market as against Rs 69 per kg for coconut oil.
