Edible oil continues on high flame

Edible oil market extended last week’s gain on Monday on concern about the kharif crop due to lack of rain in most oilseed growing states. Malaysian crude palm oil futures ended higher on the second consecutive day as concerns over tighter global oilseed supply. Groundnut oil along with imported Palmolien and Soya refined oil rose by Rs 5 each while indigenous Sunflower, Rapeseed and Cotton refined oil increase by Rs 10 each tracking over all bullish scenario worldwide.

Malaysian BMD CPO futures closed higher by 41, 49 and 51 ringgits a tonne. Domestic soya oil futures settled above the Rs 800 level, pushing sentiment higher in the physical market. Volume was routine and need-based, but the undercurrents in the market remain bullish, said a leading broker.

The spokesman of Ridhi Broker told

Business Line , “the increasing worry about ongoing kharif crop in the absence of rain and expected higher demand for edible oils in the festival season from August– December has led spot and futures markets further higher. According to oilseed crushers, rain during July 15 to August 15 will be very crucial for kharif crops. But still, there is no indication of arrivals of satisfactory rain or formation of cloudy weather in most part of the oilseed growing states. Local refineries have also increased the rates for palmolein, soya oil in line with higher import parity on weak domestic currency.”

According to Mr. Shailesh Kataria of Riddhi Broker, the moral was positive. During the day, Vaibhavi sold about 1000 -1200 tonnes of Palmolein at Rs 618. Liberty sold 80–100 tonnes of super palmolein at Rs 672 and Ruchi sold 150–200 tonnes of Soyabean refined oil at Rs 756–Rs.760.

Most of the contracts were for forward delivery. About 80–100 tons palmolein was resale traded at Rs 616-Rs.617. Higher demand for indigenous oils and oilcakes at the producing level pushed up groundnut, mustard-rapeseed and sunflower oil further higher.

The analyst said that one reason for the market rally is climate in the US and India. Another reason is the big spread between imported soyabean oil and palm oil that is more than $200 a tonne. On the demand side, traders appeared unfazed by a 21 per cent drop in Malaysian palm oil exports from July 1 to July 15 as weather fears remained in focus.

Lower Malaysian exports will affect the market temporarily, but the month is not over yet so the market is waiting for demand to pick up. Demand is expected to be supported ahead of a slew of Asian festivals starting from Ramadan and with China and India celebrating key holidays from August to November, he said.

End of the day Liberty was quoting Palmolein at Rs 624-628, Super palmolein at Rs 672, Soya oil Rs 765 and Sunflower refined oil Rs 765. Ruchi quoted palmolein at Rs 617 – 620 for July and Rs 623-627 for August. Soya refined oil at Rs 758 for July and Rs 763 – 765 for August. Sunflower refined oil at Rs 758 for July and Rs 763-768 for August.

Allana’s rate for Palmolein was Rs 623. Bunge’s rate was Rs 620 for July and Vaibhavi quoted palmolein Rs 620.

In Saurashtra

Rajkot groundnut oil ruled firm at Rs 1,880 (Rs 1,880) for Telia tin and Rs 1,225 (Rs 1,225) for loose - 10kgs. Malaysia's crude palm oil August contracts settled higher at MYR 3,100 (MYR 3,059), September at MYR 3,114 (MRY 3,065) and October at MYR 3,122 (MYR 3,071) a tone.

On the National Board of Trade

Indore, Soya refined oil August 12 futures closed higher by Rs 10 to Rs 806.20 (Rs 796.00) while September 12 up by Rs 9 to Rs 808 (Rs 799). The Bombay Commodity Exchange spot rates were (Rs10/ kg), groundnut oil Rs 1,190 (1,185), soya refined oil Rs 755 (750), sunflower exp. ref. Rs 700 (690), sunflower ref. Rs 760 (750), rapeseed ref. oil Rs 870 (860), rapeseed expeller ref. Rs 840 (830) cotton ref. oil Rs 735 (725) and palmolein Rs 618 (613).