Edible Oils: Angel Broking

Mr. Anuj Gupta (DVP - Commodities & Currencies Research, Angel Broking):

Soy Bean - Soyabean has fallen almost 3.69% in last 2 month on the back of increase arrivals and higher stocks of soyabean. In its latest press release by SOPA, soybean arrivals for the Oct-Feb period in the current crop year pegged at 73 lakh tonnes (lt), up by 24.9% on year. SOPA expects availably of soybean for crushing, direct use and exports in 2018/19 to be about 102 lakh tonnes as against 86 lt last year.

RM Seed - Mustard has fallen almost 5.83% lower in last 2 months due to slowing meal exports and higher production almost 19% this season. Mustard futures were under pressure due to slowing of meal exports coupled with reports of higher production prospects in 2018/19 season. Rape meal exports in February were provisionally reported at 41,728 tonnes (Vs 52,071 t), down 20% on year as per SEA press release. January exports figures revised higher to 57,000 tonnes from 34,270 tonnes pegged last month. As per SEA, the mustard seed production will be higher by about 19% this season to over 81 lakh tonnes due to better climate and higher area.

Ref Soya Oil - Refsoyoil has fallen almost 6.16% in last two months on the back of higher imports and strong rupee. It is now trading neat 12-week low level due to higher stocks at port, expectation of higher imports due to low tariff value and stronger rupees. Stronger rupees make import of edible oil cheaper for the country. Lower tariff, higher stocks and improving imports of edible oil is also weighing on prices. In a fortnightly notification, Government cut tariff value of crude soy oil by 18 dollar to $711 per tn for the first half of April. According to monthly report released by SEA, soy oil import jumped by 64.7% to 2.20 lt in February compared to 1.34 lt last year same month.

CPO - Crude Palm oil has fallen almost 8.3% in last 2 months due to higher production globally, lower tariff value and higher imports in India. India's palm oil imports in 2018/19 is expected to jump about 10% on year to a record high due to sharp fall in the prices. For first half of Apr, tariff value for CPO and RBD Palmolein cut by 24 and 4 dollar to 529 and 567 dollar per ton. According to SEA monthly update, import of Crude palm oil down 9% on year in February to 4.98 lt but RBD palmolein imports surged by more than 19% by to 2.41. lt mainly on reduction in duty difference.

According to USDA monthly report in February, palm oil consumption for India is forecast at 10.6 mt, up 16.7% on year. Prices of the edible oil have been weighed by expectations of rising production in March and current highs in inventory levels in Malaysia. Malaysian palm oil inventories rose 1.3% to 3.05 mt in February from a month earlier while production declined 11.1 percent to 1.54 mt.

Source : Equity Bulls

Keywords