Commodities

Edible oil declines on weak demand

Our Correspondent Mumbai | Updated on July 18, 2012 Published on July 18, 2012

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Edible oils prices declined on Wednesday, on absence of fresh local demand and tracking extendedloss in Malaysian palm oil futures. Formation of cloudy weather in producing centers increase pressure on indigenous oils while weaker exports and better palm oil production outlook in Malaysia weigh on imported edible oils. Moral was weak as there were more sellers and few buyers in the market said leading broker Mr. Dinesh Bhnushali of Riddhi broker.

Groundnut oil and Rapeseed oil decline by Rs.5 each, cotton refined oil drop by Rs.4. Imported palmolein lose by Rs.5 and Soya refined oil eased by Rs.2 for 10 kgs. Volume was thin and isolated as traders keep away from fresh bet. Malaysian BMD CPO futures closed lower by 72, 74 and 68 ringgits a ton as traders booked profits on weaker exports and better production outlook. Malaysia's July 1-15 palm oil exports tumbled more than 20 percent from a month ago at a time when stronger production is expected for the month. Slower exports and higher output could see palm oil stocks climb again after falling to a 14-month low in June.

Analyst said, some traders kept a bullish outlook as the US drought that damaged soybean crops could still shift demand to refined palm oil. The market just doesn't have enough push to go up further at the moment. But it won't be going down much also because of the wide spread between soybean oil and palm oil. Global traders are watching the weather damage on US crops as the worst drought since 1956 could trigger a serious shortage of oilseeds and vegetable oils, boosting prices and stirring food-driven inflation.

Domestic level fear of Indian Government may consider imposing stockholding limits on various agri-commodities to curb rising prices has arrested bullish sentiment of the market. Further centre may also review the export policy on agri-commodities in August by which time there will be a clearer picture on the monsoons. The prices of pulses, sugar, edible oil and food grains have firmed up in recent weeks on concerns over tight global supplies and fears of a deficient monsoon impacting domestic output this year.

According to Riddhi broker tracking weak sentiment and need based isolated local demand activities remain subdued. During the day merely 100 -150 tones of Palmolein was resale traded at Rs.611. End of the day Liberty was quoting Palmolein at Rs.621-623, Super palmolein Rs.670, Soya oil Rs.763 and Sunflower refined oil Rs.763.

Ruchi quoted palmolein at Rs 614 – 618 for July and Rs.621 for 10th August onwards. Soya refined oil Rs.755 for July and Rs 758 – Rs.761for August. Sunflower refined oil at Rs 755 for July and Rs.758-Rs.761 for August. Allana’s rate for Palmolein was Rs.615 for 1-10 August. Bunge’s rate was Rs.613 for July and Vaibhavi quoted palmolein Rs.612.

In Saurashtra - Rajkot groundnut oil decline by Rs.40 to Rs.1850 (Rs 1,890) for Telia tin and drop Rs.10 to Rs 1,220 (Rs 1,230) for loose - 10kgs.

Malaysia's crude palm oil August contracts settled higher at MYR 2,970 (MYR 3,042), September at MYR 2,982 (MRY 3,056) and October at MYR 2,993 (MYR 3,062) a tone. On National Board of Trade – Indore, Soya refined oil August -12 futures closed lower at Rs.795.30 (Rs.797.00) while September -12 was up at Rs.803.00 (Rs.801.00).

The Bombay Commodity Exchange spot rates were (Rs/10 kg): groundnut oil 1,190 (1,195), soya refined oil 755 (757), sunflower exp. ref. 700 (700), sunflower ref. 760 (760), rapeseed ref. oil 875 (880), rapeseed expeller ref. 845 (850) cotton ref. oil 745 (749) and palmolein 613 (618).

Published on July 18, 2012
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