Oil, oilseeds may remain bullish

MARKET OUTLOOK

The firmness in the oil and oilseed prices is expected to continue this week, given the higher crushing demand ahead of maintenance closures.

As the soybean season is heading for an end this May, the availability of bean for crushing is likely to decline in phases to 5 lakh tonne in April and 3 lakh hereafter, as compared to the peak availability of 10-12 lakh tonne during October - November.

"Despite lower crushing, the soy oil prices are expected to remain rangebound in the next 10-15 days. But, much would depend upon the developments in the international market," Rajesh Agarwal, chairman, Soyabean Processors Association of India (SOPA) said, adding that the domestic prices were higher than the international prices and hence there was no parity between the two. Therefore, either oil/meal prices have to go up or bean prices have to come down, Agarwal asserted.

Soya oil is presently quoted in the domestic market at Rs 45,000 per tonne, while meal and bean are quoted at Rs 11,500 per tonne and Rs 16,000 per tonne respectively. The price of landed crude soy oil at Indian ports is Rs 425-30 per 10 kg.

Against the total consumption of 75 lakh tonne, trade sources estimate the soybean production at 72 lakh tonne, while government sources estimate this at 83 lakh tonne.

The soybean crop in Brazil this year is estimated at 58.6 million tonne as compared to 56.94 million tonne last year. The crop in Argentina is also expected to see a jump of 4.4 million tonne to 45.30 million tonne this season.

Meanwhile, the prices of soybean refined and crude oil perked up by Rs 4 to Rs 452 per 10 kgs and Rs 430 per 10 kgs respectively. The prices of rapeseed refined and crude oil however, jumped by Rs 15 and Rs 8 to Rs 465 and Rs 440 per 10 kgs respectively. RBD palmolein gained Rs 4 to Rs 445 per 10 kgs, while sunflower refined oil shot up by Rs 4 to Rs 525 per 10 kgs.

Groundnut oil closed the week with a gain of Rs 15 at Rs 645 per 10 kgs. Ricebran oil and linseeds gained Rs 5 each to close at Rs 286 per 10 kgs and Rs 460 per 10 kgs respectively. However, kardi oil and sesame oil remained unchanged at Rs 525 and Rs 505 respectively.

In the oilseed section, the prices of groundnut bold closed unchanged at Rs 3,700 per quintal, while prices of groundnut kernel ended higher at Rs 3,225 per quintal, a jump of Rs 75 during the week. Niger seeds gained Rs 60 during the week to close at Rs 3,500 per quintal and groundnut shell surged to Rs 503.30 per 20 kgs from Rs 490.60 per 20 kgs in the beginning of the week.

Groundnut oil (Rajkot) firmed by Rs 20 to Rs 653.90 per 10 kgs. Cotton seed oil cake gained marginally to close the week at Rs 388.15 per 50 kgs as compared to Rs 386.25 in the beginning of the week.

Moving sharply on increasing consumer demand, mustard oil emerged as the largest gainer during the week to settle at Rs 449.5 on Friday compared with Rs 415.5 per 10 kgs on Monday. RM oil in Srigangangar ended the week at Rs 444.5 as against Rs 417.65 in the beginning of the week.

The data collected by MCX show that the polled prices of castor oil and seed perked up to a one-week high at Rs 436 per 10 kgs and Rs 2023 per quintal respectively. Similarly, ground oil moved up by Rs 21 to settle at Rs 651, while refined soya oil closed Rs 13 higher at Rs 463 per 10 kgs.

Solvent Extractors Association of India (SEA) has estimated the total imports of edible oil to increase by 15 per cent to 51 lakh tonne.

This would essentially mean that international developments would determine the domestic price trends in the weeks to come. The imports would consist of 37 lakh tonne of palm oil and 14 lakh tonne of soft oils (soy oil, sunflower oil, rapeseed oil).

SEA estimated a decline of 13 lakh tonne in the oilseeds output to 226.7 lakh tonne. The country therefore requires to import oilseeds worth 51 lakh tonne.

During Nov-06 to Feb-07, India imported 10.83 lakh tonne of edible oil.