Mumbai (Commoditiescontrol) – Indian palm futures witnessed sharp fall during previous week after bearish report published by MPOB. By the end of Week, benchmark May’19 contract, finally settled at INR 541, marking loss of 2% compared to previous week close of INR 554 per 10 kg. Open Interest on other hand increased from 2919 lots to 3687 lots in a period of one week.
Further, SEA edible oil imports data is schedule to release in a day or two which will further give clarity over total edible oils imports including palm oil in the month of March. Due to prevailing difference in duty structure, sharp increase in imports of RBD Palmolein was observed, nearly doubled to 241,101 tons in Feb.’19 from 130,459 tons in Dec.’18 i.e. up by 85% at the cost of reduced import of CPO.
The stock of edible oils as on 1st March, 2019 at various ports is estimated at 915,000 tons (CPO 470,000 tons, RBD Palmolein 235,000 tons. Market anticipation are slight drop in palm oil imports by 5-8% in the month of March’19 as excess stocks at domestic ports is keeping overall industry under pressure.
SEA raised its concerns several times about the increasing imports of RBD palmolein after the reduction in import duty and shrinking of duty difference between crude and palm oil from 10 per cent to 5 per cent on palmolein to be imported from Malaysia. However, no final decision has been made by Indian Government over this issue.
At global front, The MPOB data showed end-stocks declined 4.6% to 2.92 million tons from February, while output rose 8.3% to 1.67 million tons on the month. The estimates published by MPOB were not inline as per market anticipations, as most of the trade sources predicted fall in stocks up to 2.75 million tons. Global palm market witnessed sharp fall after release of MPOB data keeping Indian prices also under bearish note.
Meanwhile, Malaysian palm oil exports during the April 1-10 period rose from the corresponding period last month by 6.2% and 12.6%, according to Amspec Agri Malaysia and Intertek Testing Services respectively. Cargo surveyor Societe Generale de Surveillance reported a 27.6% gain in exports in the same time period. Rising exports with upcoming ‘Ramazan’ period shall provide support to falling market trend in near weeks.
To conclude, increase in seasonal and festive demand shall further support overall palm prices in near term.
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