The move is aimed at giving a fillip to the category growth, says Marico Industries CEO (nature care division) Shreekant Gupte. The company, a market leader in coconut oils, earlier made a price reduction in April this year when the MRP was cut from Rs 28-29 to Rs 26. The aim is also to woo the loose oil consumer into using packaged oil. This is expected to lead to an increase in volumes growth through conversions. Since the size of the loose oils category in the market is huge (at about Rs 700 crore in value), the scope for conversion to branded oil is high. Sliding raw material prices have affected the company's sales during the quarter ended September 2000.

Even as net profit increased to Rs 12.98 crore in the second quarter, from Rs 11.86 crore, the sales declined to Rs 163.08 crore from Rs 171.16 crore.While the raw material price decline seems to have bottomed out, the company hopes to deliver better volumes growth but sales growth may remain flat with low retail prices, feel analysts. The cyclical nature of the industry propels manufacturers to take price revisions in line with the raw material prices. The growth of the industry is currently ruling at nine per cent per annum. Parachute is a market leader in the Rs 500 -crore coconut oils market with a share of 53 per cent. Price-led overtures at the retail end are thus dictated by Parachute.

Retailers say that a price reduction in other coconut oil brands in line with that of Parachute's is inevitable. Among other players, Hindustan Lever is the second strongest with brands like Nihar and Cococare brands.