20/07/2010 (The Hindu Business Line) - As arrivals of copra into the Kerala market have trickled down on account of persistent rains, the price of coconut oil has firmed up this week. Coconut oil which opened firm at Rs 5,325 a quintal on Monday moved up to close at Rs 5,375.

“Firm trends are also emerging in Kangeyam in Tamil Nadu as coconut oil prices have moved up to Rs 5,300 and the price difference with the Kerala market has narrowed down. While copra arrivals to the Kangeyam market continue unabated, coconut oil flow from Tamil Nadu to Kerala has not increased as the price differentials have narrowed down,” MrPrakash B. Rao, President of Cochin Oil Merchants' Association, said. However, close to 30 tonnes of the 100 tonnes of coconut oil sold in Kerala market still come from Tamil Nadu.

Low arrivals have also resulted in copra prices moving up to Rs 3,600-3,800 a quintal. The firm trend in most other edible oils and the advent of Onam festival are other reasons for the price spurt. Although the price of palm oil has remained steady at Rs 4,200, price of the superior palm kernel oil remains competitive at Rs 5,300.

The industrial buyers who manufacture soaps, shampoos and cosmetic oils continue to focus on Tamil Nadu for their coconut oil demand. Consumers such as Marico and Dabur India were reportedly quite active in the market despite the small price rise. The Kerala market remains more a consumer-oriented market meant for edible oil consumption. However, with the narrowing of the price difference even the industrial consumers are expected to re-enter the Kerala market. On Monday alone, Wipro purchased close to 50 tonnes of coconut oil, sources in the oil trade said.

Market sources expected the firm undertones to continue well into the coming month as the Onam festival season will set in and coconut oil consumption is expected to spurt up on account of increased edible oil consumption in Kerala.