MUMBAI (commoditiescontrol) - A downtrend was seen in edible oil market this week on outlook of high supply globally.
CRUDE PALM OIL:
Malaysian Crude palm oil gained this week largely on sign of improved demand at lower level.Cargo surveyor SGS reported Malaysian palm oil export during 1-20 April was up 4.7 percent against same period last month.
In addition to it, palm oil prices in global market were trading at discount to other edible oils due to which importers got the opportunity to buy edible oil in good quantity.
By weekend, Malaysian palm oil was quoted $675 per tonnes in FoB terms, while Argentina soy oil was $702.
The focus now will be on the release of Malaysia palm export estimates for the first 25 days of April as market participants look to see whether demand holds up.
According to market participants, demand for refined soy oil likely to improve in near future due to month-long Muslim festival "Ramzan". 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 22 percent by April 17 and totaled 1.44 lakh tonnes, against 1.86 lakh tonnes on April 4. 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 higher 0.35 percent at kandla port in dollar terms (CNF) this week, while prices were down 1.80 percent in Rupee terms. In futures market, Malaysian crude palm oil benckmark July contract closed up 1.20 percent, while at local bourses most active April contract on Multi Commodity Exchange (MCX) closed higher 1.55 percent.
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.
NEXT WEEK: Palm oil market likely to trade with downward sentiment on outlook of high global 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 declined to 1.18 lakh tonnes on April 17 against 1.23 lakh tonnes on April 4.
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 1.94 percent at Rs 625/10kg this week, while prices were steady at 766 in dollar terms (CNF) at Kandla port and was lower 2.5 percent at 600 in Rupee terms.
According to market participants, demand for refined soy oil likely to improve in near future due to ongoing marriage season. Refined soy oil prices will also get support in near-term as rival mustard oil Kacchi Ghani is trading at a premium of Rs 10.80/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 up 2.40 percent this week on low level buying interest.
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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