Weekly: Spot RBD Palmolein To Trade Higher Amid Festive Demand

MUMBAI(Commoditiescontrol):

Malaysian Palm Oil Futures
Malaysian palm oil futures during the week ends up by 0.22 percent at MYR 2,682/tonne buoyed by expectations of rising demand and tracking gains in palm kernel oil prices. Palm prices were supported by overnight gains in U.S. soyoil on the Chicago Board of Trade.

The market is up on expectations of strong demand as key markets of India and China could stock up on purchases of the tropical oil ahead of the Diwali and mid-Autumn festivals in October.

Malaysian palm oil exports for the first half of August (i.e 1-15 August) dropped compared with the corresponding period in July, according to data from cargo surveyors.

Intertek Testing Services reported a 14.6 percent decline, while Societe Generale de Surveillance showed a 12.8 percent drop.


Crude palm oil was supported by gains in palm kernel oil, which rose to its highest in nearly three months on Thursday. The price of palm kernel oil, a substitute of coconut oil usually used to make soap, detergent and cosmetics, was last at 4,894.24 ringgit a tonne, its highest since May 25.
The only worrying factor for the market is rising production as the peak production cycle of palm starts in July and ends in October.


For next week Malaysia palm oil futures will take cues from Aug 1-20 export and production data which will be released on 21st August.
Domestic RBD Palmolein Scenario
RBD palmoelin gained by Rs 5 to trade at Rs 560/10kg at kandla port amid good demand whereas it has gained by USD 2.5 to trade $685/tonne.


Further the port stock of RBD palmolein has declined to 2,57,308 as of 18th August from 2,80,383 tonnes on 7th August 2017.
According to traders, in coming week RBD palmolien prices may trade higher as there is good demand in Maharashtra for Ganesh Chaturthi festival which will start from 25 August 2017.
However, from long term perspective India's refined palm oil imports are likely to plunge in the next marketing year as changes in trade tariffs make imports of crude oil cheaper, a boon for refiners previously hit by cheaper imports of rival goods. Indian government has increased the import duty on crude oil by 5% from 12.5% and by 10% from 15% on RBD palmolein.
In the first nine months of the current marketing year started on Nov. 1, India has imported 6.74 million tonnes of palm oil, including 2.2 million tonnes of refined palm oil.
Palm oil's share in India's total edible oil imports has been falling consistently due to competition from rival soyoil and sunflower oil. In 2015/16 palm's share fell to 58 percent from 80 percent in 2012/13.
Regular demand will always be there but because soyoil duty is less, buyers may switch to soy oil.
NEXT WEEK: RBD palmolein prices are likely to trade higher on account of good demand amid upcoming festive season.
(By Commoditiescontrol Bureau; +91-22-40015516)