Palmolein drops on Malaysian cues

Our Correspondent Mumbai | Updated on April 07, 2011


Spot palmolein fell by Rs 4 for 10 kg in Mumbai on Thursday following the decline in crude palm oil (CPO) futures at Bursa Malaysia Derivatives (BMD). Other oils continued their uptrend. Prices moved up on low arrivals of groundnut, soyabean and rapeseed in main producing areas. In Mumbai, groundnut oil rose by Rs 5 for the fifth consecutive day on buying from brand makers and seed exporters at the producing level.

Malaysian BMD CPO futures closed lower as investors' booked profits on a bearish supply outlook. More downside is likely with analysts estimating March stocks to reach 16-16.5 lakh tonnes, levels not seen since December 2010.

In Mumbai, soya refined oil increased by Rs 1, groundnut oil by Rs 5 and rapeseed oil by Rs 3 for 10 kg. Cotton oil and sunflower oil ruled steady. Volumes were thin on need-based buying. Morale was steady, said traders.

Analyst said Malaysia's palm oil stocks are likely to hit three-month highs in March as a strong recovery is expected in production, which may outstrip overseas demand. Soya market also faced pressure from the continuing harvest of what is expected to be a record South American soya bean crop, and talk of a foreign buyer switching to South America from the US.

India's NBOT soya futures could not sustain the rally and fell sharply as investors booked profits. In Rajkot, groundnut oil rose sharply by Rs 35 to Rs 1,280 (Rs 1,245) for telia tin and Rs 25 to Rs 830 (Rs 805) for 10 kg loose. Arrivals of new crop are less than expected. In the local market, palmolein was quoted higher in the ready market as stocks have been exhausted. In the forward market, resalers were offering at the lower rate. Volumes were thin on Thursday. About 100-150 tonnes of palmolein was resale-traded at Rs 556-560.

Sources said on Wednesday late evening about 2,500-3,000 tonnes of edible oils (palmolein, and soya and sunflower oils) were traded directly and in resale. Only needy buyers participated. The usual demand seen at the start of a month kept sentiment steady. Liberty was quoting palmolein at Rs 558. Ruchi's rates for palmolein were Rs 557, for soya refined oil Rs 604 and for sunflower oil Rs 660. Allana was offering palmolein at Rs 560 for 10 kg. Resalers were quoting palmolein at Rs 560 for ready delivery, he added.

Malaysia's BMD CPO April contract closed at MYR3,375 (MYR3,416), May at MYR3,338 (MYR3,386) and June at MYR3,322 (MYR3,376) a tonne. Indore NBOT soya oil April contract was at Rs 614 (Rs 617) and May at Rs 628 (Rs 630).

Mumbai commodity exchange spot rate (Rs/10 kg): Groundnut oil 810 (805), soya refined oil 605 (604), sunflower exp. ref. 630 (630), sunflower ref. 675 (675), rapeseed ref. oil 610 (607), rapeseed expeller ref. 580 (577), cotton ref. oil 598 (598) and palmolein was 563 (567).

Published on April 07, 2011

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