Sri Lanka’s coconut auction prices recover 15-pct in snap back
ECONOMYNEXT – Sri Lanka’s fresh coconut prices rose 15 percent to 39.93 rupees a nut at the last auction of August in Colombo, recovering from a 30 percent plunge at the beginning of the month, in a classic ‘commodity price snapback.’
When commodities fall off a peak, they tend to overshoot as traders and wholesalers do not like to hold stocks which are falling in value but tends to bottom out and recover some of the losses.
At the August 30 auction 972,772 nuts were offered and 787,987 were sold.
In July coconuts were around 45 rupees a nut at auction.
Sri Lanka’s coconut output is recovering after a two year drought.
In July/August output was projected to rise to 30 percent to 512.5 million nuts from 394.7 million nuts.
Coconut farmers got record prices for their nuts up to the middle of this year, as output fell amid the drought.
Farmers are now seeing better harvests, but lower prices per nut.
Demand has been weak in recent week with desiccated mills closing after Sri Lanka coconut prices rose as much as 64 rupees a nut in the first quarter.
Coconut consumption is also expected to rise as retail prices fall and DC mills and oil mills re-start operations.