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Refined Soya Oil Eases, Soymeal Demand Seen Lower

Refined soya oil prices eased further today amid a good start for the rabi sowing and ideas that the soybean arrivals would increase in local mandies in near term. Weak soymeal demand is also keeping a tab on sentiments. Prices had jumped to nine-month highs before falling amid waning buying support. A generous start to the rabi sowing season is making traders bring out their stocks of oil in the market, ensuring heavy supplies. The crushing activity in the major centers is also likely to see a good momentum in the current month as the soybean and groundnut supplies improve. Prices are quoting around Rs 705 per 10 kg in Indore, down Rs 5 per 10 kg on the day. 

Refined soya oil prices had jumped near Rs 750 per 10 kg in early November, extending a massive break on the higher side. Worries on the standing crop in MP and Gujarat had boosted the sentiments in last few days. The commodity was also supported by a strong upmove in the crude palm oil prices overseas and the local spot refined soya prices hit their nine-month highs before topping out. 

According to a latest update from the Central Organisation for Oil Industry & Trade (COOIT), last year`s soybean crop revised downward to 107.00 lakh tons from 113.40 lakh tons. In the current year, in spite of sizable increase in area under soybean, the crop is lower than last year due to extensive damage both in term of quality and quantity due to heavy rain fall during end September also early October at the time of harvesting. COOIT sees the marketable soybean surplus this season at 89.80 lakh tonnes, down nearly 10% from 97 lakh tonnes last year. 

Meanwhile, world palm oil production in the vegetable oil year starting from Oct. 1, 2013, is set to rise by 3.5 million tonnes over the current year, stated Dorab Mistry, the influential edible oil analyst. Rising demand from the biofuel industry could keep crude palm oil (CPO) prices in a narrow range of 2,200 to 2,400 ringgit in the short term, Mistry said. CPO futures in Malaysia eased today, witnessing selling pressure around its one year high. The benchmark CPO contract shed MYR 16 or 0.62% to close at MYR 2588 per tonne today. According to the latest data from Agricultural Ministry, India`s Kharif oilseeds acreage stood at 193.96 lakh hectares, up 11% on the year. 

Source : Capital Market

Shubhlaxmi Harish

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