Mumbai (commoditiescontrol) - Edible oil prices closed lower this week in volatile trade weighed by negative fundamentals.
CRUDE PALM OIL:
Malaysian palm oil futures slumped to a more than five-month low on Friday evening, shedding earlier gains as they tracked a weaker performing rival soyoil on the Chicago Board of Trade.
The contract fell 3.5 percent for the week, and was down 14.5 percent for the quarter ended March.
Palm was down despite stronger export data, showing a near 7 percent gain in Malaysian palm oil shipments for the full month of March versus the previous month.
Exports rose 6.8 percent versus the previous month, data from cargo surveyor Intertek Testing Services showed, while Societe Generale de Surveillance showed a 6.9 percent gain.
Demand for palm oil is expected to rise in April, as buyers stock up ahead of Ramadan, the Muslim festival at the end of May, marked by month-long fasting in regions such as India and the Middle East.
With the impending rise in production, the market is going down and market participants are focusing on forthcoming government data on Malaysian's March palm oil production. Industry players and traders are forecasting a rise in March production but the growth rate remains uncertain.
Demand for palm oil which is currently weak but likely to increase from mid April once temperature starts rising coupled with higher supply from producing country's are likely to keep prices stable.
In addition RBD palmolein port stock at various ports of the country has decreased to 0.97 lakh tonnes from 1 lakh tonnes on weekly basis as on March 20 which is sufficient to meet the demand.
In addition to it, palm oil prices in forward contract (in FoB terms) is trading at discount, indicating supply to rise in coming months and will be available at cheaper rates.
Crude palm oil prices at domestic bourses were down inline with benchmark Malaysian market. Most active March delivery contract on Multi Commodity Exchange (MCX) closed 0.77 percent lower.
NEXT WEEK: Market participant will focus on demand next week and will trade accordingly.
REFINED SOY OIL:
Refined soy oil closed down in benchmark Indore market of Madhya Pradesh on poor demand.
U.S futures market closed down this week due to higher production prospects of soybean from South America.
The major setback for soy oil demand at higher level was weak demand in spot market, specially from remote and interiors parts of the country coupled with other states where consumption of other edible oil was more.
On the other hand appreciation of rupee against the dollar by 2.70% during March month is also weighing on soy refined oil prices as the import of soy oil has become cheaper.
Import of soybean oil is in parity of Rs 23/10kg which is further pressuring soyoil prices.
The other rival mustard oil price gap has increased to Rs 12/Kg against Rs 7 from previous week.
In addition soy oil port stock at various ports of the country has increased to 1.21 lakh tonnes from 0.94 on weekly basis as on March 20 which is sufficient to meet the demand which will weigh on soyoil prices.
In futures market, soy oil most active April contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) were down 0.15 percent this week, while forward May contract was lower 0.25 percent.
NEXT WEEK: soy oil likely to trade range-bound with volatility as low demand at higher level will pressure, while positive global cues if any may support. Rupee will also play major role in price movement. Over-all prime focus will remain on demand.
(By Commoditiescontrol Bureau; +91-22-40015516)