Spiralling coconut oil price is spreading cheer among coconut farmers, while the traders are a worried lot as there is no sign of a let-up in price rise. The prices have been rising for the last two months driven by a combination of factors like international trend, increase in consumption of coconut and its products and a shortage of copra.
On Wednesday, the wholesale spot price of coconut oil stood at Rs 6,640 per quintal. The futures at the First Commodities Exchange of India (FCCI) here, also showed an upward trend with August futures at Rs 6,850 per quintal, September at Rs 6,870 and October at Rs 6,955.
FCCI chairman PV Alexander said the indications are that the prices could touch Rs 7,000 per quintal. The main reason, according to him, is the rising edible oil prices in the global market. It has been reflected in the domestic market as well.
The efforts of the Coconut Development Board (CDB) to increase the consumption of coconut products seem to have borne fruit. There is an increased demand for coconut oil as well as for coconut desiccated powder, coconut milk and cream etc.
“The export demand of these products have risen. The local vanaspathi industry has started using coconut oil as it was the cheapest,” Mr Alexander said. Meanwhile, insufficient rains have upset the calculations of cardamom farmers in the main producing region of Idukki district as auctions for the new season begin.
The auctions of KPMC in Kerala started on June 22 while CPMC auctions began on July 2. From Rs 611 per kg in June, the average price of cardamom slipped to Rs 511 per kg on Wednesday’s auctions. However, the arrivals are low at 22.5 tonnes though harvest has begun.
According to market sources, the trade has been expecting a higher crop this year. In 2007-08, the cardamom crop was 9,470 tonnes. This year with bountiful summer rains, the farmers had expected a crop of over 12,000 tonnes. But with a weak monsoon so far, the farmers doubt whether higher production could be achieved.
Source: Economic Times
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