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November 12, 2008
 
India Oilseed Weekly: Government shows no move to hike edible oils duty (Week ended Nov 8, 2008)
 
An eFeedLink Exclusive
 
 
Price Summary
 
Soy Indore prices crashed this week on Saturday and settled at Rs. 16,500 as compared to last week's closing rate of Rs. 24,000 as on November 1, 2008. 
 
Almost, the majority of commodity items including rapeseed, sunflower seeds, soymeal Indore, soymeal 48 percent and sunflower meal were stable as compared to last week's prices.
 
Peanut kernal and rapeseed meal were the gainers with a little difference of Rs. 500 and Rs. 100 per tonne respectively.
 
The worst affected price was of peanut meal, which settled at Rs. 14,500 from last week's Rs. 14,750.
 
Pearl Millet (Bajra) was traded from Rs. 7,400 to Rs. 7,500 per tonne this week in Delhi.
 
Groundnut Extraction (GNE) 40% and GNE 45% were traded at Rs. 13,000 and Rs. 14,000 per tonne respectively.
 
 
Market Analysis
 
The Union Agriculture Minister, Mr. Sharad Pawar, on Thursday (November 6, 08) ruled out any immediate move to re-introduce or raise import duties on edible oils.
 
Speaking on the sidelines of an international conference on "Wheat Stem Rust Ug99: A Threat to Food Security," the minister said the domestic prices of oilseeds were still ruling above the minimum support price (MSP) levels and therefore, there was no case for taking any early decision on import duties.
 
Since April 1, 2008, the basic customs duty on crude oils (palm, de-gummed soy and sunflower) has been set at nil, with refined oils attracting a 7.5-percent rate.
 
Currently, yellow soy is selling in the Indore market at Rs. 16,250 to Rs. 16, 300 per tonne. Excluding market expenses and other levies including gunny costs, farmers are receiving a price of Rs. 15,300 to Rs. 15,500 a tonne, which is above the MSP of Rs. 13,900 a tonne for the current year.
 
The Empowered Group of Ministers (EgoM) had, in its meeting earlier this week, deferred a decision on hiking tariffs for imported edible oils. It is also decided to continue with the current ban on export of all non-basmati rice.
 
NCDEX adds delivery center
 
NCDEX has announced a modification in the crude palm oil contract specification. It has added Kakinada as an additional delivery center in all the running contracts of the commodity.
 
Kakinada is one of the largest ports for crude palm oil imports in India. The addition of Kakinada center would help in increasing the participation from the South based importers, processors and traders.
 
"The changes have been made in all the running contracts until January 2009 and also for all the contracts to be launched henceforth," an NCDEX press release said.
 
More than 1 million tonnes of soymeal contracted for export
 
Indian exporters have contracted to export around 1.1 million tonnes of the new soymeal crop for shipment in November-December, a senior industry official said on Wednesday (November 5).
 
"The deals have been contracted at an average price of US$290 to US$300 a tonne, although some deals in the beginning of the new crop season were signed at around US$400 a tonne," said Mr. Rajesh Agrawal, coordinator of the Soybean Processors Association of India.
 
He further said although prices have fallen in the last few weeks, soymeal exports were likely to be robust this year at 5.5. million tonnes.
 
"Even at the current levels of US$290 a tonne, we are better off than our competitors," Mr. Agrawal added.
 
Rise in most crops' rabi acreage
 
Area under all rabi crops, barring rice, is showing a rise even as sowing gathers momentum. The Agriculture Ministry's latest data shows that farmers have been helped by good rainfall in September under the influence of the south - west monsoon.
 
Better rabi sowing was expected as the kharif crop was affected due to a dry spell between July and August after a good rainfall at the beginning of the monsoon season. This is in view of good storage levels and more importantly, good soil moisture too.
 
More promising is the coverage under pulses, which is witnessing a sharp rise. So far, 6.38 million hectares have been covered under pulses against 3.9 million hectares. In particular, sowing under gram has increased to 4.46 million hectares from 2.91 million hectares.
 
Oilseeds, which have been affected a bit in the kharif season due to erratic monsoon, are showing promise, particularly mustard.
 
Coverage of mustard has increased to 3.48 million hectares as against 2.12 million hectares last season, while groundnut, too, has gone up to 0.15 million hectares to 0.12 million hectares.
 
Overall, the area under oilseeds has increased to 4.67 million hectares against 3.15 million hectares during the corresponding period a year ago.
 
Guar Seed
 
Guar trades steady to mildly firm on renewed buying. Prices hover in a narrow price band due to exporters' inactivity.
 
Harvesting picks up in North Rajasthan, while arrivals from West Rajasthan commence from mid-November. Timely sown crop is in seed setting stages in major belts.
 
Soy
 
Crop trades firm on steady global and domestic demand. Harvesting/ post harvesting is smooth in Madhya Pradesh and Maharashtra and will pick up pace as weather is dry and clear.
 
Output is likely to remain high on increased acreage. But adverse weather during maturity might affect the yield to some extent.
 
Ground Nut
 
Diminishing demand after the festive season may pressurize the groundnut prices.
 
Increase in export prospects may support the prices in the medium term. Weather is congenial for crop in major groundnut belts like Gujarat, Andhra Pradesh and Maharashtra where good rain was received this season. 
 
 
Market forecast
 
Guar Seed
 
Guar trades steady to mildly firm on renewed buying. Prices hover in a narrow price band due to exporters' inactivity.
 
Soy
 
Crop trades firm on steady global and domestic demand.
 
Ground Nut
 
Diminishing demand after the festive season may pressurize the groundnut prices.
 
Increase in the fresh arrivals and low buying interest may keep prices weak.
 

The comparison rates of nine commodities like Soy/ Peanut/ Rapeseed/ Sunflower and their meals

Commodities

Prices as on Nov 1

Prices as on Nov 8

Difference

   Soy (Indore)

       24, 000

         24, 000

       Stable 

   Soy Meal 48%

       14, 000

         14, 000

       Stable

   Soymeal Indore

       14, 675

         14, 850

       +  175  

   Peanut Kernal

       30, 500

         31, 000      

       -   500 

   Peanut Meal

       14, 750 

         14, 750

       Stable

   Rapeseed

       30, 000  

         30, 000 

       Stable

   Rapeseed Meal

       10, 350

         10, 500

       +  150  

   Sunflower

       28, 000

         28, 000

       Stable

   Sunflower Meal 

       10, 800

         10, 900

       +  100 

US$1 = Rs 48.575 (Nov 12, 2008)

 


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