Mumbai (Commoditiescontrol) – Indian palm market remained sluggish during previous week following global market. Malaysian palm prices were falling due to stronger ringgit and lack of clarity over US-China trade disputes pushed soybean priced on lower side. In the end CPO prices settled at 568.2, down by almost 2% on weekly basis.
In India, Palm oil imports declined by 2.31% to 8,15,236 tons in January from the year-ago period, industry body Solvent Extractors Association (SEA) said previous week. It, however, indicated higher shipments of RBD palmolein in coming months from Malaysia due to lower duty. India, the world's leading vegetable oil buyer, had imported 8,34,444 tons palm oil in January 2018.
The country's total vegetable oil imports declined 3% to 12.75 lakh tons in January this year compared to 12.91 lakh tons in the year-ago period. The share of palm oil is more than 60 % in the country's total vegetable oil imports.
According to the SEA, the shipments of palmolein, especially from Malaysia, have increased due to cut in import duty on palm oils, which has reduced the effective duty difference between crude palm oil (CPO) and RBD Palmolein to just 5 % against previous 10 %. "This has resulted into sharp increase in import of RBD Palmolein to 1,67,429 tons in January from 1,30,459 tons in December 2018, up by 28 %," it said in a statement. This is likely to increase in coming months considering the shipments lined up from Malaysia for export of RBD Palmolein to India, the SEA noted.
Among palm oil products, import of RBD palmolein increased to 1,67,429 tons in January this year from 1,50,664 tons a year ago, as per the SEA data. But the shipment of CPO declined to 6,45,308 tons from 6,72,762 tons, while that of crude palm kernel oil (CPKO) too dropped to 2,499 tons from 11,018 tons in the said period.
Among soft oil, import of sunflower oil increased to 2,00,027 tons in January this year from 1,70,831 tons in the year-ago period. The shipment of soybean oil fell sharply to 1,85,906 tons from 2,24,870 tons, while that of rapeseed-mustard oil declined to 9,434 tons from 16,702 tons in the said period.
As on Feb 1, about 21.10 lakh tons of vegetable oil stock is lying at ports and in pipelines. The country's monthly requirement is about 19 lakh tons. India imports palm oil mainly from Indonesia and Malaysia, and a small quantity of crude soft oil, including soybean oil, from Latin America. Sunflower oil is imported from Ukraine and Russia.
At global front, MPOB released the first report of the year showing Jan stocks falling by 6.69%, the first fall in 8 months prompted by lower production (-3.90%) and higher exports (21.19%). Rising stock from Jun to a record high of 3.215 million ton in Dec was the main negative variable in keeping palm prices in check. However, market already discounted the fact of fall in stocks earlier and thus there was no reaction of same on the prices.
Further, as per most of the surveyors, Feb 1-15 exports from Malaysia were once again higher on monthly basis. As per SGS, Malaysia Feb 1-15 palm oil exp 4.2% up at 674,129 v/s 647,062 MT. AMspec reported Shipments rose by 12.9% m/m from 607,220 tons to 685,779 Tons. Similarly, as per ITS, 1-15 Feb exports were at 686,657mt vs 615,565mt for 1-15 Jan – increment of 71,092mt or +11.55%. High exports demand shall keep supporting the Malaysian pam prices.
Moving ahead, surplus stock availability shall keep domestic prices under pressure. Meanwhile ongoing US-Sino trade talk shall hold the importance for next week which shall keep palm prices on mixed tone. A clarity over same shall further help the market sentiments to take clear direction.
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