Spot RBD Palmolein To Trade Steady To Up Next Week

MUMBAI(Commoditiescontrol): This week prices of RBD palmolein declined on account of poor domestic demand.

Demand is very sluggish in spot market as most of the wholesale and retail traders have sufficient stocks with them which can meet the near term demand.

The price gap between soy oil and palm oil has widen during the week which is supportive for RBD palmolein. As of now Malaysian RBD Palmolein(FOB) is trading at a discount of USD 100 to Argentine soy oil (FOB) vs USD 80 a week ago.

RBD Palmolein prices were lower by USD 7 to trade at 677.50 per tonne in dollar terms (CNF) at Kandla port and also declined by Rs 3 to trade at Rs 522/10kg in rupee terms.

India's edible oil purchases - mainly palm oil from Malaysia and Indonesia - have increased each year since 2010/11, according to SEA.

The imports in the decade to 2015/16 rose an average of 12 percent a year, making it the world's biggest importer of palm oil and soyoil. India relies on imports for 70 percent of its edible oils, up from 44 percent in 2001/02.

Palm oil accounts for more than half of India's total edible oil imports. Its purchases are likely to be 8.5 million to 8.7 million tonnes this year, compared with 8.44 million tonnes in 2015/16.

Palm oil production from the world’s largest producer, Indonesia jumped significantly by 33.5% to 3.330 million ton in May compared to same time last year and edged up 7.98% compared to the previous month, according to latest data from GAPKI. This is the fourth successive monthly rise as Indonesia begins to recovers from the losses faced last year.

Overall export was reported unchanged from last month at 2.678 million tons but export of processed and crude palm kernel oil rose noticeably by 23% to 177,510 tons. While domestic consumption was lackluster adding just 0.66% from the previous month and 2.45% from same time last year. Quota for biodiesel which is the main consumption segment in Indonesia was reduced this year from the previous year, therefore limiting consumption growth.
Meanwhile, end month stocks was reported falling 30% from the previous month to just 621,000 tons, the lowest seen since January 2016.

Malaysian palm oil futures up by 0.15 percent this week at MYR 2,572/tonne on account of improved export demand