Mumbai (commoditiescontrol) - Domestic RBD Palmolein prices were mostly higher during the week ended on Saturday, 20th May, largely supported by strong demand coupled with weak rupee.
Malaysian palm oil futures were up 0.98 percent this week on renewed market talks of low production in May month with improved demand ahead of Ramadan.
The South Palm Oil Millers Association (Malaysia) has estimated May 1-15 production down 2.2 percent.
Further export demand for palm oil has improved sharply by 20 percent during May 1-20.
However, funds feel exports are higher than May 1-15, which was around 8-10 percent versus same period a month ago.
RBD palmolein prices at Kandla port increased by Rs 15 to trade at Rs 570/10kg during the week, and also prices have jumped by USD 30 to trade at 755 per tonne.
Depreciating India currency has also lent support to palm oil market as the import of RBD palmolein becomes costlier so most of the importers are staying away from bulk purchases.
Import of RBD palmolein is costlier by Rs 6/10kg at Kandla port due to which there is tightness in supply which is also driving the prices higher.
The difference with Malaysian palm oil (FOB) and Argentina soy oil (FOB) was $42 per tonne for June delivery.
The correction in prices during the last couple of weeks has made vegetable oil prices attractive that has prompted some fresh buying during the week. Firm global market was also helped in bolstering market sentiments.
At local bourses, the most-active May RBD palmolein contract gained 1.63 percent or Rs 9/10kg to close at Rs 553.90/10kg on the National Commodity & Derivatives Exchange Ltd. The contract during the week traded in the range of 545-562.50
Palm oil prices in the domestic market are likely to improve next week ahead of Ramzan festival coupled with lower supply as import is in disparity.
Weak Rupee is also likely to support the market sentiment.
NEXT WEEK: RBD palmolein prices are likely to trade higher on account of improved demand and lower supply.
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