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MUMBAI (commoditiescontrol) - A downtrend was seen in edible oil market this week on outlook of higher 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 1-10 April was up 21 percent against same period last month. Whereas, Malaysian palm oil board(MPOB) estimated palm oil production up 16.33 percent during March month.
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 $695 per tonnes in FoB terms, while Argentina soy oil was $696.
With low price gap within oil complex, importing countries are likely to shift to soy.
According to CC-Analyst, crude palm oil prices may remain under pressure as production of palm oil is likely to increase in Indonesia and Malaysia. Further increasing supplies of other edible oils is also weighing heavily on prices of palm oil.
The focus now will be on the release of Malaysia palm oil export estimates for the first 15 days of April as market participants look to see whether demand holds up.
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 (CPO+RBD) stocks at various ports of the country dropped sharply 26 percent by April 4 and totaled 1.86 lakh tonnes, against 2.53 lakh tonnes on March 20 but still sufficient to mmet the demand.
Market will also feel pressure as new crop arrivals of mustard seed likely to rise in near future and improve supply of mustard oil.
RBD Palmolein prices was weak 0.70 percent at kandla port in dollar terms (CNF) this week, while prices were down 0.88 percent in Rupee terms.
In futures market, Malaysian crude palm oil benckmark June contract close down 1.77 percent, while at local bourses most active April contract on Multi Commodity Exchange (MCX) close higher 0.85 percent and forward May contract was up 0.85 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.
In addition to it, Soy oil stock at various ports of the country was steady at 1.23 lakh tonnes on April 4 against 1.21 lakh tonnes on March 20.
Local supply of edible oil seen enough to meet any immediate demand, due to which demand has turned as per requirement as traders 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.
Soy oil prices in benchmark Indore market was down 0.94 percent this week, while prices were higher 1.30 percent in dollar terms (CNF) at Kandla port and was lower 0.85 percent in Rupees terms.
According to market participants, demand for refined soy oil may improve in near future due to ongoing marriage season followed by month-long Muslim festival "Ramzan".
Refined soy oil prices will also get support in near-term as rival mustard oil Kacchi Ghani is trading at a premium of Rs 12/Kg versus soy oil.
However, big upside for soy oil is not seen as supply for the same seen easily available from local global markets.
CBOT soy oil futures was down 0.98 percent this week largely due to robust crop of South America.
In futures market, soy oil most active May contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) was up 0.32 percent this week, while forward June contract was higher 0.44 percent.
NEXT WEEK: Soy oil will continue to remain under pressure on outlook of high supply of edible oil coupled with tepid demand.
(By Commoditiescontrol Bureau; +91-22-40015516)
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