Stocks of edible oil cos Marico and Raj Oil Mills jump as copra prices decline

Shares of edible oil manufacturers surged, after a marked decline in copra prices due to poor stockists demand and strong supply chain. Companies, like Marico and Raj Oil Mills, use copra (or dried coconut) to extract oil, which is used as a key ingredient in personal grooming products and as a cooking medium.

According to a broker, copra prices (of varying grades) in Mumbai and the South have fallen by around 120 per quintal over the past one week.

"Fall in copra prices will have a positive impact on overall earnings of Marico and Raj Oil Mills; Marico's profit margins had come down in the past two quarters, primarily because of higher copra prices in January and May. Edible oil manufacturers will benefit, if copra prices will stay put at current levels for some time," the broker said.

Marico and Raj Oil Mills closed 1-2% higher at 146 and 21, respectively, on the BSE.