Coconut oil prices have risen significantly due to Onam festival demand, with Kerala's wholesale rates reaching ₹260 per kg compared to ₹242 in Tamil Nadu, according to traders. The ensuing festival season has pushed prices up after remaining subdued for several months. Copra prices have also increased to ₹168 per kg in Kerala and ₹163 in Tamil Nadu, as reported by industry sources. Thalath Mahmood, President of the Cochin Oil Merchants Association (COMA), confirmed that the ongoing harvest season in several producing states has ensured adequate availability of copra, with no justification for the current price rise.
Traders have alleged that the price rise was artificially created by vested interests in neighbouring states to cash in on the Onam season by holding copra stocks, despite sufficient availability of raw material in the market. However, procurement agencies reportedly withdrew from purchases following the price surge, forcing millers to moderate prices and maintaining market stability over recent days. This has helped the market remain steady over the past few days, as millers have been forced to moderate prices in response to the withdrawal of procurement agencies.
Coconut oil prices had touched a record high of more than ₹500 per kg in July 2025, according to industry data. The current price levels represent a significant decline from those historic peaks, though they remain elevated compared to recent subdued periods. Raw coconut prices have also risen to around ₹65 per kg during the current period, as confirmed by industry sources.
Improved local arrivals and better regional crop yields following last year's severe pest attacks and weather disruptions have helped ease supply constraints, as noted by KK Devraj, a consultant to the coconut oil industry. While supplies have improved significantly from last year's massive deficit, Onam traditionally drives a 10-20% increase in local demand and demand is expected to remain firm through the festival period. Prices are likely to face moderate upward pressure during the peak two to three weeks preceding Onam owing to immediate retail demand, according to industry experts.
Demand is expected to remain firm through the festival period, supported by household cooking requirements, industrial production of sweets and snacks, and subsequent pan-India demand ahead of Ganesh Chaturthi and the Sabarimala season. Unlike previous years when severe shortages triggered sharp price spikes, improved raw material availability is expected to cap inflation and prevent extreme fluctuations, with retail coconut oil prices likely to remain relatively steady rather than approach historic highs. The upward trend is expected to ease once the festival season is over, as confirmed by industry experts.
