NEW YORK (Commodity Online): The soybean oil demand is predicted to jump higher due to low palm oil production expected in 2012, according to a report on soybean outlook by CME group.
The palm oil production in Malaysia, second largest palm oil producers, has already dropped in November due to excess monsoon rainfall and drop is expected to continue into February 2012.
The US soy bean oil stock is declining due to increase use, mainly due to the increase in bio-diesel usage. According to reports, the US ending stocks for 2011-12 has dropped to seven years low.
Indonesia is the worlds largest producer and exporter of palm oil. Total exports of palm oil from Indonesia are forecast to rise 14 percent in 2011/12 to 18.9 million tons. But the country plans to introduce control policy over the palm oil exports which is to upset the international market. This has also boosted the demand for soyabean oil in the global market.
Meanwhile, US experienced slow exports, however the estimates from China has indicated that their import demand for 2011-12 is close to 60 million tons while the USDA estimates was just 56.5 million tons
Large soy bean output is seen in India and Canada, but china's production is said to fall. So tarders will be closely monitoring India, if there is a weather porblem, it can boost the import of the crop.
Indian farmers are estimated to have harvested a record 11 million tons of soybeans this year on an all-time high of 10.3 million hectares and In Canada, production of soybeans is estimated at 4.25 million tons, improving by 9 percent from last month and slightly below last year’s record of 4.35 million tons.
Due to a record level of old-crop stocks in Brazil, soybean export prices at a discount to U.S. Gulf prices.
Brazil’s has shipped a record 3.2 million tons odf soybean in October-November 2011. In particular, soybean shipments from Brazil to China expanded by 1.5 million tons. But the demand for soybean from European Union (EU) has dipped drastically.
USDA has lowered 2011-12 forecast of EU soybean imports by 300,000 tons to 12.3 million and down from 12.5 million in 2010-11.
But due to present global economic scenario the import demand outside China is expected to slow down.
On NCDEX, the Refined soy oil for January delivery traded up 1.12% to Rs 722.75 and On Intercontinental Exchange, the commodity trade at 51.70 cents.
Meanwhile, Crude palm oil (CPO) on MCX for January delivery traded up 1.41 % to Rs 555.05.
While , NCDEX Soybean for january delivery traded up1.68% to Rs 2486.00 and on ICE, it traded at 1199.75 cent on 28th December at 14:45 IST
