January 14, 2008

 

India edible oil prices up on likely fall in rapeseed output
 

 

Indian edible oil prices were up for the week ending on Friday (January 11, 2008) due to strong gains in global palm and soyoil markets, traders said.

 

Fears of a fall in rapeseed production because of low acreage and unfavorable weather during sowing also kept sentiment firm, they said.

 

India's edible oil prices are directly impacted by global markets as the country imports more than half of its annual edible oil demand of about 12 million tonnes.

 

"India's rapeseed production in 2008 is expected to fall below the earlier projected 5.5 million tonnes due to low acreage and bad weather during sowing time. This could have a negative impact on availability of local edible oils as rapeseed has one of the highest oil contents among all edible oils," a trader-based in central Indian province of Indore said.

 

Last year, India produced around 5.7 million tonnes of rapeseed. As per the latest government data, to date rapeseed has been planted on around 5.87 million hectares, down from 6.64 million a year earlier.

 

"The sharp gains in global edible oils markets because of a spike in crude oil also pushed up sentiment in local markets," Rajini Panicker, head research, MF Global (India), said.

 

Throughout the week, India's edible oil markets were awash with rumors of a cut in import duties by the federal government to reign in spiraling local prices.

 

Although the government didn't confirm this, but a section of the traders said that such a move just ahead of rapeseed harvest will discourage farmers.

 

Friday, local groundnut oil prices were at INR67,000/tonne, up from INR66,000/tonne a week earlier.

 

Crude palm oil was at INR50,500/tonne, up from INR47,500/tonne a week earlier.

 

Refined soyoil prices were at INR58,000/tonne, down from INR55,500/tonne a week earlier.

 

MYR1 = US$0.307 (Jan. 14)   INR1 = US$0.0255 (Jan. 14)