Edible oils slip on sluggish demand, global cues

Snapping a four-week rising trend, edible oil prices slipped at the wholesale oils and oilseeds market during the past week due to sluggish demand at existing high levels amid weakening global trends.

A few oils in the non-edible section also showed weakness on reduced offtake by industrial units and other consuming industries.

Trading sentiment turned bearish as palm oil dropped after Malaysia, the second-biggest producer, said stockpiles climbed to the highest level in 16 months on a surge in output.

Besides, adequate stocks available in the market against sluggish demand from millers and local parties at existing levels also weighed on the edible oil prices.

Meanwhile, palm oil declined by 5.3 per cent this week, the biggest weekly loss in more than two months on the Malaysia Derivatives Exchange, the lowest close since May 12.

Palm oil inventory in Malaysia climbed 14.8 per cent to 1.92 million tonnes in May from a month earlier, the highest level since January last year, the Malaysian Palm Oil Board said. Output expanded 13.7 per cent to 1.74 million tonnes from April, the highest in 19 months.

In the edible oil section, mustard expeller oil (Dadri) declined by Rs 50 to Rs 5,800 per quintal, while mustard pakki and kachi ghani oils traded lower by Rs 10 each to Rs 760-915 and Rs 915-1015 per tin, respectively.

Cottonseed mill delivery oil (Haryana) shed Rs 70 to Rs 5,530 per quintal, while sesame mill delivery oil fell by Rs 30 to Rs 6,230 per quintal.

Taking weak cues from overseas markets, palmolein (rbd) and palmolein (kandla) plunged by Rs 170 each to Rs 5,830 and Rs 5,530 per quintal, respectively.

Soyabean refined mill delivery (Indore) fell by Rs 100 and soyabean degum (Kandla) declined by Rs 70 to Rs 6,300 and Rs 5,900, respectively. Crude palm oil (ex-kandla) lost Rs 100 to Rs 5,300 per quintal.

In the non-edible section, linseed oil declined by Rs 50 to Rs 4,550 per quintal on lack of demand from paint units. Castor oil also shed Rs 50 to Rs 8,500-8,600 per quintal.

GRAINS: The slide in wheat and rice basmati continued for yet another week at the wholesale grains market on adequate stocks following increased supplies and record procurement of wheat. Subdued demand from bulk consumers also put pressure on the prices.

Traders said adequate stocks following increased arrivals of new crop and record procurement, along with reduced offtake by flour mills and local parties, led to the decline in wheat dara and rice basmati prices.

Meanwhile, wheat procurement broke a record with 26.43 million tonnes of wheat purchased so far on the back of record production of the rabi crop.

In the national capital, wheat dara (for mills) remained weak and shed Rs 5 to Rs 1,180-1,185 per quintal. Atta chakki delivery followed suit and traded lower by the same margin to Rs 1,185-1,190 per 90 kg. Atta flour mills and maida declined by Rs 10 each to Rs 640-660 and Rs 670-700 per 50 kg, respectively.

In the rice section, rice basmati common shed Rs 100 and Pusa-1121 declined by Rs 200 to Rs 5,200-5,300 and Rs 4,000-5,000 per quintal, respectively.

Barley also plunged by Rs 65 to Rs 1,250-1,275, while maize lost Rs 25 to Rs 1,200-1,210 per quintal.

SUGAR/JAGGERY: Barring a fall in sugar millgate and gur khurpa, sugar and gur prices almost showed a quiet trend at the wholesale market during the past week on reduced offtake against adequate supply.

Trade analysts said reports of a bumper sugarcane production this season maintained pressure on prices amid local and bulk consumer demand for summer. Select millgate sugar prices declined on fresh off-loading by millers against ample supply.

In sugar section, sugar spot medium and second grade prices remained flat through the week in limited deals and settled at Rs 2,900-3,000 and Rs 2,870-2,990 per quintal, respectively.

Mill delivery medium and second prices also remained unchanged at Rs 2,700-2,890 and Rs 2,675-2,865 per quintal, respectively.

In millgate section, sugar Kinnoni and Mawana prices eased marginally by Rs 10 each to Rs 2,860 and Rs 2,800 per quintal, respectively.

In the jaggery market, gur chakku and pedi prices closed at Rs 2,700-2,800 and Rs 2,900-3,000 per quintal, respectively, while dhayya and shakker prices closed at Rs 3,100-3,200 each per quintal in Delhi.

In Muradnagar markets, gur pedi remained unchanged at Rs 2,700-2,750 per quintal.

In Muzuffarnagar, gur khurpa prices eased by Rs 25 to Rs 2,350-2,525 from Rs 2,375-2,550 per quintal on sluggish demand, while gur raskat ruled flat at Rs 2,200-2,300 a quintal on some support.

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