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Despite a short-term supply shortage in the copra market during November, coconut oil prices in India have remained largely flat, supported by adequate stocks in the market. However, traders expect supply conditions to tighten further during the transition to the next harvest season, potentially exerting upward pressure on prices in early 2027.
The Cochin Oil Merchants’ Association (COMA) reported that coconut oil and copra markets in Kerala witnessed mixed price movements. In Kerala, coconut oil prices declined by ₹3 to ₹250 per litre, while copra prices rose by ₹2 to ₹158 per kg. In the Kangeyam market, coconut oil prices increased by ₹3 to ₹208.50 per kg, while copra prices also gained ₹3 to ₹151 per kg.
Prakash Rao, president of COMA, noted that while the overall market witnessed stronger copra prices, coconut oil milling prices showed divergent trends. He highlighted that coconut oil is currently facing a demand crisis due to soaring price levels. This has prompted consumers, particularly from the HORECA (Hotel, Restaurant, and Cafe) segment who purchase in large volumes, to shift toward cheaper imported alternatives.
Traders and stockists in Tamil Nadu have accumulated large quantities of copra, anticipating a price rise during the off-season. However, the expected surge has failed to materialize despite the onset of the traditional off-season. Rao added that production and market activity remained below expectations even during major festive periods such as Diwali. Given the current availability of copra, pressure from existing stocks, and production forecasts for the upcoming season, further price corrections are likely as the new production season begins after January 15.
K K Devraj, a consultant in the coconut oil industry, suggested that the demand for coconuts and coconut oil during the ensuing Sabarimala pilgrimage season is expected to push prices higher in the coming months. Local millers are expected to be more aggressive in their copra purchases to cater to this seasonal demand. Furthermore, while the harvest season in Kerala starts early next year, cumulative rainfall deficits in southern states are weighing on local water reserves. This typically slows down fresh nut arrivals and keeps copra prices supported in Tamil Nadu and Kerala.
Source: BusinessLine