Monday, May 25, 2009
Low oilseed yield to keep cooking oil prices burning - The Economic Times
22/05/2009 (The Economic Times), Kolkata - The way vegetable oil prices in the global market are rising by the day, chances of any further drop in cooking oil prices at home are remote. Cooking oil prices are ruling at no less than Rs 70 per kg at the retail-end.
Global oil prices are up on reports of a decline in oilseeds output in several countries.
Riding on a bullish sentiment, palm oil prices shot up $250 per tonne, while soya oil and sunflower oil were up by $100 per tonne each in the past one and a half months. Now, the minimum price level is feared to touch a new high following a fresh bout of increase in global oil prices over the past couple of days, when palm oils prices flared up $10-15 per tonne. Moving in tandem, soya oil prices too moved up.
Analysts feel that the bullish sentiment in the global market will get reinforced with reports pouring in from Malaysia about a fall in palm oil production. The latest report suggests that palm oil production in Malaysia is likely to be at 17.8 million tonnes in the current oil year (October 2008- September 2009) as against the previous estimate of 18 million tonnes. This has expectedly raised palm oil prices above the $700-mark.
As a result, the landed price of refined, bleached and deodorant (RBD) palmolein in India has increased $10 to $850 a tonne as of now. While crude palm oil (CPO) is up $20 to $800 a tonne. Traders feel that an upward revision in domestic prices will take place as soon as stocks from earlier imports, which were at lower rates, dry up.
Apart from crop in Malaysia, soyabean crop in Argentina has turned out to be much lower than expected. In early March, the estimate was at 43 million tonnes, whereas the best estimates today are almost 10 mt lower, according to industry analyst Dorab Mistry. The US has also reported a drop in soyabean cultivation this year.
According to the US department of agriculture (UDA), soybean plantings were spread over 76 million acres against an expected coverage of 80-81 million acres. Canola acreage in Canada has shrunk and rapeseed output is estimated to drop from 2.8 mt to 1.4 mt.