Will the surge in sunflower and palm oil prices in the wake of Ukraine-Russia conflict benefit coconut oil?
Coconut oil producers are hoping to cash in on the global crisis at a time when there is a gradual shift in consumer preference toward coconut oil in the domestic market encouraged by its lower price compared with other oils.
Last year, the high price of coconut oil resulted in consumers migrating to cheaper edible oils. Traders are now expecting the return of these consumers including hotels, catering units, individual households etc to this traditional cooking oil medium, especially when sunflower and palm oil rates have substantially spiked due to Ukraine crisis.
Thalath Mahmood, Director, Cochin Oil Merchants Association, expressed the hope that the surge in sunflower and palm oil would push up local consumption of coconut oil, leading to an improvement in its prices. Disruption in the arrivals of sunflower oil due to Ukraine crisis may pushits price up further.
Currently, copra prices are ruling in the range between ₹85 and ₹90, while coconut oil prices stand at ₹145-150 against last year’s price of ₹175-180 in the wholesale market. Today, sunflower oil prices are ruling at ₹180 per kg, while palm oil is ruling at ₹160 compared with ₹130 and ₹120 respectively a month ago, he said.
However, official sources in the coconut sector are cautiously optimistic about a sudden hike in prices not happening, citing a good production season, ensuring sufficient availability of copra stock in the market.
Dip in consumption
Ubais Ali, CEO, Mezhukkattil Mills, a leading coconut oil trading company in Kochi, told BusinessLine that the increased availability of copra and the sluggish demand in the market due to Covid has reduced consumer intake of coconut oil to a certain extent. When prices of sunflower and palm oil are ruling higher, coconut oil prices are dwindling because of abundant supply, thanks to a good crop season due to good rains in the State. This is expected to continue for some more time, he said, adding that a consumer shift for coconut oil is likely to arrest further fall in its prices.
Official sources said nut production has gone up in all major producing centres by more than five per cent. Production in Kerala during 2020-21 was around 6,974.50 million nuts on an area of over seven lakh hectares. Farmers are now looking at procurement announced by the government due to fall in prices. The government has asked Nafed to procure 50,000 tonnes, but it will take some more time for the procurement to get into full swing.
Source : The Hindu Businessline
