11/03/2008 (The Hindu), Kollam - As Malaysia has begun diverting huge quantities of palm oil for the production of biofuel, the international price of the oil is soaring. The development will have a major impact on Kerala economy since palm oil is a widely used medium of cooking in the State.

The bulk of the palm oil sold in the Kerala markets is imported. Edible oil dealers closely watching the situation feel that a price climb at this rate can hit family budgets and bring about a price rise in bakery brands and hotel food. The highly popular ‘barottas’ will be among the first to be hit if palm oil prices rise further. While the price of palm oil remained in the vicinity of Rs.50 during January, on Monday the retail price touched Rs.80 a kg from Rs.75 a kg the previous day.

On the other side, the good news for Kerala is that the demand for coconut oil has boomed in the wake this development. On Monday, retail price of coconut oil climbed from Rs.65 a kg to Rs.70 a kg.

Bound to rise
Cochin Oil Merchants Association (COMA) director Talat Mohammed told The Hindu here on Monday that under the given situation, the palm oil price is bound to climb further. Mr. Mohammed said that as per statistics computed by COMA, the average annual consumption of palm oil as a cooking medium in Kerala is 2.50 lakh tonnes. Coconut oil consumption stands at 1.50 lakh tonnes a year. Apart from its household consumption, palm oil is widely used in hotels and bakeries.

Merits of palm oil
Due to its versatility, palm oil has a bigger consumer acceptance than coconut oil. Food items prepared in palm oil remain fresh for a longer period than coconut oil, those in the retail food industry say. A lot of palm oil is used while preparing ‘barotta’ to maintain its freshness. Those in the food industry said that food items meant for a longer shelf life get rancid sooner if prepared in coconut oil. With palm oil, that is not the case.

Moreover, for frying a quantity of food where 1 kg of palm oil will be sufficient, more than 1.5 kg of coconut oil will be required, they pointed out. That is the reason why palm oil is popular in the commercial sector.