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Mumbai (commoditiescontrol) - A downtrend was seen in edible oil market this week on outlook of high supply globally.
CRUDE PALM OIL:
Crude palm oil dropped this week largely pressured on sign of slow demand coupled with rising production of edible oil globally.
Cargo surveyor ITS reported Malaysian palm oil export during 1-25 February was down 1.86 percent against same period last month. Whereas, Malaysian palm oil Association (MPOA) estimated palm oil production to fell 2 percent during 1-20 February.
In addition to it, palm oil prices in global market were trading close to other edible oils due to which importers got the appourtunity to buy edible oil as per requirement.
By weekend, Malaysian palm oil was quoted $717.5 per tonnes in FoB terms, while Argentina soy oil was $738 and Ukrainian sunflower oil was last quoted $740.
With low price gap within oil complex, importing countries are likely to shift to soy or sunflower oil.
According to CC-Analyst, crude palm oil prices may remain under pressure as Malaysia raised its CPO export tax to 8 percent for March against 7.5 percent in February, While Indonesia has maintained its export tax at $18 per tonne for the same period.
Outlook for regional oil is fragile as hike in export tax may slow down demand coupled with low price gap with other oil.
In domestic market, traders opted to stay away from market on anticipation of further price fall as demand is weak and supply is high.
Palm oil (RBD+CPO) stock at various ports of the country was 2.06 lakh tonne as on Feb 20 against 2.48 lakh tonnes on Feb 13. While over-all edible oil stock remain stable at 4.90 lakh tonne against 5 lakh tonne during same period.
Market will also feel pressure as new crop arrivals of mustard seed likely to rise in coming days and improve supply of mustard oil.
RBD Palmolein prices was weak 0.33 percent at kandla port in dollar terms (CNF) this week, while prices were down 2.5 percent in Rupee terms.
On the other hand, palm oil demand in local market was as per requirement as traders and stockist opted to stay away from big commitments due to low price gap in import cost.
In futures market, Malaysian crude palm oil benckmark May contract close down 1.9 percent, while at local bourses most active March contract on Multi Commodity Exchange (MCX) close lower 1.83 percent and forward April contract was down 1.7 percent.
NEXT WEEK: Palm oil market likely to trade with downward sentiment on outlook of high globla supply of edible oil.
REFINED SOY OIL:
A weak tone was witnessed in refined soy oil in benchmark Indore market of Madhya Pradesh on high supply outlook and weak demand.
Sentiment was weakened since last week after Agriculture Ministry have forecast nearly 33 percent jump in local oilseed production giving way to 25 percent rise in edible oil output in crop year 2016-17.
In addition to it, soy oil stock at various ports of the country was stable at 1.49 lakh tonne as on February 20 against 1.60 lakh tonne on February 13.
Local supply of edible oil seen enough to meet any immediate demand, due to which demand has turned as per requirement as tracders expect supply is easily available.
Soy Oil supply seen higher than expected from South America, while Malaysian palm oil output is set to rise in coming weeks as palm trees is recovering from last year dryness and Ukraine is already in the market with big sunflower oil supply.
Argentina soy oil FoB was down 1.2 percent this week tracking 1.5 percent fall in U.S futures market.
Soy oil prices in benchmark Indore market was down 1.9 percent this week, while prices were soft 0.13 percent in dollar terms (CNF) at Kandla port and was lower 2.2 percent in Rupees terms.
In futures market, soy oil most active March contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) was down 1.34 percent this week, while forward April contract was lower 1.44 percent.
NEXT WEEK: Soy oil will continue to remain under pressure on outlook of highs supply of edible oil coupled with tepid demand.
(By Commoditiescontrol Bureau; +91-22-40015516)
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