Edible oils prices rose steadily, tracking an extended gain in palm, soya futures markets overseas on Friday. Imported palmolein and soya bean refined oil rose by Rs 2 and Rs 5 each. Indigenous edible oils such as groundnut oil rose Rs 10 on tight supply in producing centre. Sunflower, rapeseed and cotton refined oil increase by Rs 5 each. Volume was isolated for the second day on increase resale-selling pressure due to lower demand during month-end period. Cautious sentiment prevailed due to lack of demand, said a broker.
Malaysian crude palm oil futures extended gains for a sixth consecutive day. BMD crude palm futures futures closed higher by 13, 10 and 8 ringgits a tonne on Friday, heading for a second straight weekly gain as global oilseed supply fears and rising export demand supported prices. Fear of a tighter soya bean oil supply has led to a shift demand to the cheaper palm oil.
An analyst said a crop tour gave evidence of the devastation following the US grain belt's worst drought in half a century, which has lifted soya bean prices to all-time highs in recent weeks. Corn and soya fields in Iowa, top growing state for both crops, have fallen victim to the historic drought and is expected to drag national yields below the government's latest projections, according to the Pro Farmer Midwest Crop Tour.
The market is trying to catch up with soya oil, especially as its premium over palm oil is at more than $250 a tonne. Exports should improve further. Domestic level soyabean and rapeseed also rose, tracking firm cues from overseas markets, but recent rainfall in oilseed growing areas in India may weigh on sentiments, he said.
Market observers say as edible oil prices have gone up sharply this month and stockists have covered sufficiently, they prefer to stay away from fresh buying and concentrate on taking deliveries of their old commitments. About 100-150 quantity of palmolein was resold at Rs 620 on isolated trade. There were no activities in indigenous oils.
As palm oil markets enter peak production months in September and October, the current rally may be capped. But smaller supply of soya bean oil at the world level may support cheaper palm oil. Overseas markets are influencing domestic prices. Weak rupee and demand in the physical market ahead of festivals will support prices. A weak rupee makes edible oil imports expensive, he said.
At the close of the day Liberty was quoting Palmolein at Rs 628-629 for September and Rs 630-631 for October; Super Palmolein at Rs 670 and Rs 672; Soya oil at Rs 775 and Sunflower refined oil Rs 785. Ruchi quoted Palmolein at Rs 627 up to September 20 and Rs 629 for September 21-30. Soya refined oil Rs 775 and Sunflower refined oil Rs 780. Allana’s rate for Palmolein was Rs 624. Resellers were quoting Palmolein at Rs 620-623. In Saurashtra-Rajkot, Groundnut oil price was Rs 1,990 (Rs 1980) for Telia tin and Rs 1,300 (Rs 1,320) for “loose” 10 kg.
On the National Board of Trade-Indore, Soya refined oil September -12 futures closed higher at Rs 807.00 (Rs.805.00) and October-12 closed at Rs 817.00 (Rs 808.00). Malaysia's crude palm oil September -12 contracts closed at MYR 3,030 (MYR 3,017), October -12 closed lower at MYR 3,051 (MYR 3,041) and November -12 at MYR 3,069 (MYR 3,061) a tonne.
Bombay Commodity Exchange spot rates were (Rs/10 kg): Groundnut oil 1,260 (1,250), soya refined oil 770 (765), sunflower exp. ref. 720 (715), sunflower ref. 775 (775), rapeseed ref. oil 900 (895), rapeseed expeller ref. 870 (865) cotton ref. oil 770 (765) and palmolein 622 (620).