Kannur: Global prices of coconut oil are unlikely to drop remarkably this year, according to projections. The World Bank’s Commodity Markets Outlook had forecast an increase of $ 250 per tonne earlier this year, which has materialised. As per the report, the expected average price of coconut oil in 2025 is $ 1,800 per tonne, up from $ 1,519 in 2024—a rise of $ 281. The projected price for 2026 is $ 1,750 per tonne, indicating a marginal decrease of 2.8% compared to 2025. Even if prices dip slightly mid-next year, they are expected to remain higher than in previous years.

Kerafed chairman V Chamunni noted that the price hike has prompted many, including farmers in Kerala, to return to coconut cultivation. As of early last month, wholesale prices had risen by over 84% and retail prices saw a 71% increase. Meanwhile, copra production in South India has dropped by 40%, hugely impacting coconut oil manufacturers, according to Kerafed managing director Saju K Surendran.

The World Bank report attributes up to a 20% drop in production in Kerala, Tamil Nadu and the Philippines to climate variability. Pest attacks, storm damage and other factors have affected plant health and productivity. Additionally, the growing use of coconut oil in cosmetics and biofuel industries has led to increased global demand, driving prices up. Value-added coconut products have also gained popularity in the US and European markets in recent times.

Will there be a price hike during Onam season?

Anticipating a price surge during the Onam festival, Kerafed is planning to distribute coconut oil to BPL (Below Poverty Line) cardholders at subsidised rates, announced chairman V Chamunni, managing director Saju K Surendran and vice chairman K Sreedharan at a press conference. A proposal seeking the State Government’s approval for the scheme will be submitted soon. Efforts are also underway to increase the availability of coconut oil in the Onam market.

Kerafed has already begun procurement of raw coconuts from Cherupuzha by offering one rupee more than the prevailing market rate. In collaboration with ESAF, procurement centres will be opened in the districts of Malappuram, Kozhikode and Palakkad. In Thrissur, raw coconuts will be procured through cooperative institutions. The aim is to convert raw coconuts into copra and produce high-quality coconut oil.

Meanwhile, officials warned of the possibility of adulterated coconut oil entering the market during the festive season.