Weak rupee, firm futures heat up edible oils

Edible oils remained bullish on Monday tracking a weak rupee and firm futures. The rupee plunged to 55.71 against the dollar, lowest in over two and a half months, on persistent dollar demand and rising concerns of about the ‘fiscal cliff’ in the US and the Euro-Zone debt crisis.

Groundnut oil rose by Rs 10 for 10 kg and cottonseed refined oil by Rs 5 for 10 kg. Imported palmolein and soyabean refined oil improve by Rs 3 and Rs 5 each. Sunflower and rapeseed oil ruled steady. Local refineries have increased their rates for edible oils following the fall in the rupee’s value, higher demand and firm futures markets. Malaysian palm oil futures close higher on Monday on expectations stocks might grow at a slower pace with the market also focusing on Greek financial aid deal.

A commodity analyst said data from a cargo surveyor showed Malaysian exports declined at a much slower pace, putting some pressure on stocks and supporting palm oil prices that have fallen by 24.2 per cent so far this year on roiling financial markets. If exports maintain its 2 per cent drop for the full month, it means that although the inventory is poised to go higher, it may be growing at a slower rate than expected.

At home, the bullish sentiment continued in main producing areas, especially in groundnut and cotton oil in Gujarat. Tight supply of nut seeds for crushing and demand for cheaper substitute are supporting futures. About 25,000-30,000 bags of groundnuts arrived in Saurashtra.

Soyabean arrivals in Madhya Pradesh were 3.25-3.50 lakh bags and in Rajasthan and Maharashtra about 1-1.25 lakh bags. Lower arrivals pushed up soya futures further.

A broker said during the day, 2,000-2,200 tonnes of oils were traded in Mumbai. Liberty sold about 550-600 tonnes of palmolein, 150-200 tonnes of super palmolein, 100-150 tonnes of soyabean refined oil and 50-80 tonnes of sunflower refined oil. Ruchi sold 800-900 tonnes of palmolein and 100-150 tonnes of soyabean refined oil. In the resale market, 80-100 tonnes of palmolein were sold at Rs 514-515.

At the end of the day, Liberty was quoting palmolein at Rs 520-522, super palmolein at Rs 572, soya refined oil at Rs 705 and sunflower refined oil at Rs 780. Ruchi quoted palmolein at Rs 518, soyabean refined oil at Rs 700 and sunflower refined oil at Rs 771. Allana offered palmolein at Rs 516 and super palmolein at Rs 570. In Saurashtra and Rajkot, groundnut oil was Rs 1,950 (Rs 1,950) for a telia tin and Rs 1,270 (Rs 1,270) for loose (10 kg).

On the National Commodities and Derivatives Exchange, soyabean refined oil’s December contracts were up to Rs 732.30 (Rs 725.65), January to Rs 725.05 (Rs 717.80) and February to Rs 717.35 (Rs 710.65).

Malaysia’s crude palm oil’s December contracts settled at MYR2,265 (MYR2,267), January at MYR2,385 (MYR2,355) and February at MYR2,432 (MYR2,395) a tonne.

The Bombay Commodity Exchange spot rates (Rs/10 kg): groundnut oil 1,250 (1,240), soya refined oil 700 (695), sunflower exp. ref. 705 (705), sunflower ref. 775 (775), rapeseed ref. oil 847 (850), rapeseed expeller ref. 817 (820) cottonseed ref. oil 680 (675) and palmolein 516 (513).