July 7, 2008

 

India's edible oil up on tighter supply

Indian edible oil prices during the week ended Friday (July 6, 2008) rose, tracking gains in overseas markets and supply tightness in physical markets.

 

Soy prices in the international markets soared on supply concerns in the US due to adverse weather conditions.

 

In India, the price of local edible oils are directly impacted by international markets as the country imports nearly half of its annual edible oil demand.

 

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

 

Locally too, supply concerns continue to buoy prices of edible oils despite the government's plan to sell imported oil at subsidized rates to lower income households.

 

"Processing of soy in the local markets in India is very low currently as stocks are limited. This has pressured availability of soyoil in the market," said a trader-based in the central Indian province of Madhya Pradesh.

 

Soy is the main oilseed grown in India, sowing of which is currently underway in the country.

 

Thursday, state-run trading house PEC Ltd. floated a tender to import 24,000 tonnes of crude degummed soyoil as part of the government's plan to import 1 million tonnes of edible oil to improve supply in local markets.

 

"This tender limited gains in the edible oil complex," said the trader.

 

Meanwhile, the area under oilseed cultivation during June 1-July 3 was up at 5 million hectares compared with 4.95 million hectares a year ago.

 

Sowing of soy 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 tonnes.

 

India's and oilseed crop planting has been progressing well so far due to good rains in the last month, according to latest data released by the farm ministry Friday.