July 14, 2008

 

India edible oil prices down on low demand

India's edible oil prices declined during the week ended Friday as demand fell and supplies improved marginally, traders said.

 

"Government imports of RBD palm olein in the last few weeks has led to a slight improvement in supply of edible oils in the country," said Ramesh Malpani, an Indore-based trader.

 

However, the decline in prices is likely to be limited in coming weeks as overall supply is still tight, he said.

 

"On the physical side, there are hardly any stocks left and the inflow would come only after October harvest. Till that time the markets would be highly influenced by international movement," said a Kotak Commodity Services report.

 

International markets are expected to be firm due to supply tightness and uncertainty over a farmers' strike in Argentina, said Malpani.

 

In India, prices of local edible oils move in tandem with international rates as the country imports nearly half of its annual edible oil requirement.

 

It buys soyoil from Argentina and Brazil and palm oil from Malaysia and Indonesia.

 

Meanwhile, area under oilseed cultivation during June 1-July 3 was up at 5.00 million hectares compared with 4.95 million hectares a year ago, latest farm ministry data showed.

 

Sowing of soy, main oilseed grown in India, was carried out in 2.48 million hectares, up from 2.21 million hectares a year ago, while groundnut was sown in 2.07 million hectares, up from 1.93 million hectares.

 

The country's weather department has said that rain will be subdued in the next 5-6 days in central India, where most of Indian soy is grown.

 

Local refined soyoil was at INR67,000/tonne (US$1573.70) Friday, down from INR67,500/tonne (US$1585.44 )a week earlier.