Mumbai (Commoditiescontrol) – Indian crude palm oil traded weak in earlier sessions of the week which were later pushed upside following rally in Soyabean market. Finally, the MCX Feb’19 futures after making a low of INR 549.5, finally settled at INR 559.5 per 10 kg, higher by 1% on w-o-w basis.
During opening of the week, Indian government revised tariff value on CPO to USD 544 from 503, OLN to 556 from 540, CDSBO to 686 from 708 vide Notification dt.15.01.19. Effective duty on CPO Rs.17054.40 (+1285.35) OLN Rs.19609.43 (+564.30) CDSBO Rs.18817.84 (-603.49) per MT. The revised duty structure nullified the impact of duty reduction done in CPO earlier during the month and also made imported olien cheaper compared to domestic prices. With the revised structure the Imported RBD palm oil is costing Rs 23 lesser than domestic market, as a result of it, one might notice reduction in CPO imports, while the RBD olein imports shall surge which shall have negative impact on domestic refining industry.
During Nov.-Dec.’18, Palm Oil import has increased to 1,503,527 tons from 1,439,825 tons during the same period of last year, however Soft Oils import decreased to 715,620 tons from 843,779 tons during the same period of last year. The stock of edible oils as on 1st Jan’19 at various ports is estimated at 805,000 tons of which CPO is 430,000 tons and RBD Palmolein is around 150,000 tons. Huge stock piles shall cap any significant upside rally in near term.
According to experts from Oil World , in 2018/19 MY, India can import about 15.42 million tons of vegetable oils, which will exceed the result of the previous season (14.6 million tons) and will also be the maximum figure for the country over the past 5 seasons.
At global front, as per latest ITS report, Malaysian palm oil exports during 1-20 of this month were observed close to 912061 tons vs. 808061 tons shipped during 1-20 December. As per the report the major destination for Malaysian palm oil was EU where total exports were near 1.74 lakh tons compared to 1.13 lakh tons a month earlier. Despite boos in total exports, demand from India and China remained weak as the total imports to these countries were down by 28% and 11% respectively. India imported 1.80 lakh tons vs. 2.49 lakh tons while China imported 1.88 lakh tons vs. 2.12 lakh tons imported in 1-20 Dec. Weak exports from Malaysia to India despite duty cut depicts a sign of poor demand and excessive stock availability, which shall keep the overall sentiment on bearish tone.
Southeast Asian palm oil stocks reached record highs last year amid weak demand, but are expected to ease in the coming months in line with seasonal production trends. Palm oil stocks in Indonesia, the world's top producer, were at 3.9 million tonnes in November, having peaked at close to 5 million tonnes in July. Second-largest producer Malaysia saw inventories climb to a record high of 3.2 million tonnes in December. In an effort to boost palm oil consumption, Indonesia raised its biodiesel mandate last year to require all diesel fuel used in the nation to contain biodiesel starting from the beginning of September. Indonesia's mandate requires a 20 percent bio-content in biodiesel, but prior to September that was mandatory only for subsidized diesel users.
Compiling the above fundamentals, sluggish import demand from China and Indian front along with huge stocks pilled up across all the countries like India, Malaysia and Indonesia shall have adverse effect on Palm market sentiments.
(By Commoditiescontrol Bureau)
0 Comments 
Post Comment 
