February 14, 2009

 

India soyoil prices extend losses on high edible oil imports

Indian soyoil prices in the local markets extended losses during the week ended Friday (February 13), weighed by rising inflow of cheaper overseas edible oil into the country.

 

"Domestic crushing of oilseeds has been subdued in the last couple of months due to a sharp rise in cheaper imported oils in the market," said a trader based in the main soy producing province of Madhya Pradesh.

 

India's vegetable oil imports in January surged to a level not seen since 1994, and the Asian nation bought rapeseed oil for the first time in five years, driven by a sharp drop in international prices and expectations of the government re-imposing import duty on crude palm oil.

 

The country purchased 888,102 tonnes of vegetable oil, compared with 513,253 tonnes during the same month a year ago, data from the Solvent Extractors' Association of India showed Thursday. Rapeseed oil shipments were at 1,914 tonnes.

 

In the oil marketing year that started November, total edible oil imports as of January totalled 2.09 million tonnes, up from 1.08 million tonnes a year ago, the data showed.

 

Traders forecast India's edible oil imports to range 600,000-650,000 tonnes in the next three months, with crude palm oils imports of 500,000-550,000 tonnes and soft oil imports of 100,000-150,000 tonnes.

 

India imports nearly half of its vegetable oil requirements of 12 million tonnes. It imports palm oil from Malaysia and Indonesia and soyoil from Brazil and Argentina.

 

India's rapeseed oil imports come as the country is expected to harvest a record crop of 6.98 million tonnes, according to latest government data. The new crop is expected to arrive in the market from next month, exerting further pressure on prices, the trader said.

 

Prices of refined soyoil fell to INR44,200 from last week's price of INR45,000/tonne.

 

However, palm oil prices ruled firm in the domestic market buoyed by an upward trend in Malaysian palm oil prices, which rose on a possible strike in Argentina by soy farmers that may prompt buyers to switch to palm oil from soyoil.

 

US$1 = 48.5950 INR (Feb 14)