Monthly Prices Movement

  • A steady to positive trend was seen in most of the Edible Oil complex during the month in major markets across the country.

  • Groundnut Oil was in the negative side mostly during the month as restricted demand and high supply pressurized the prices.

  • Good demand from buyers due to the peak festival season in India and stability in global markets supported the prices of Edible Oil complex.

Ground Report

  • India's Edible Oil purchases advanced sharply by 14.2% to 1.376 million tons in September as compared to 1.205 million tons a year early, as per Solvent Extractors Association of India (SEA).
  • India Soybean Oil imports have jumped 46% to 0.469 million tons during September this year against 0.321 million tons September last year.
  • India’s large population and rising incomes, along with its low Soybean yields and a decrease of its Soy Oil tariffs, have also factored into increasing Soy Oil imports.
  • India’s imports of Soybean Oil have quadrupled in the last five years to more than 4 million metric tons this year and expected to rise over the next 10 years by as much as 40%. Demand from India will certainly play a role in absorbing excess Soy-Oil supplies.
  • SOPA stated that India's import of Vegetable Oils during September this year is reported at 1.399 million tons compared to 1.216 million tons in September last year, consisting of 1.376 tons of Edible Oils and 23,343 tons of non-Edible Oils i.e. up by 15%.
  • The overall import of Vegetable Oils during first eleven months of the current oil year 2015-16, November 15 – September 16 is reported at 13.566 million tons compared to 12.942 million tons, an increase of 5%.
  • Edible Oil stocks at the four major ports of India as on October 17 totaled at 387,356 metric tonnes, down from 381,285 metric on October 10.

Policies

  • India is to come up with productivity enhancement programme for Oilseeds to meet the annual consumption of vegetable oil in India by 2020 and 2025 with institutional and policy support in a campaign mode besides technological support from ICAR.

  • It has been estimated that Oilseed production should reach 86.84 MT and 93.32 MT by 2020 and 2025 respectively to meet the demand for vegetable Oil in the country, as per agriculture minister.

  • India imported Rs 69,717 crore worth of Edible Oils during last fiscal to meet the domestic demand, according to the agriculture minister.

  • Agriculture minister said that he growth rate of Edible Oil consumption has increased at 4.3 percent and the country has to import more than 50 per cent of Edible Oil this year to meet the demand.

Global

  • China’s Vegetable Oil imports in marketing year 15/16 declined and could be even lower in MY16/17 due to high crushing volume of Oilseeds and the sales of state Oilseed product reserves, said United States Department of Agriculture (USDA).

  • Soybean Oil imports of China in MY16/17 are forecast at 600,000 tons and Rapeseed Oil imports are forecast at 700,000 tons. Chinese Peanut Oil imports are forecast at 120,000 tons in MY16/17, unchanged from MY15/16.

  • Due to the relatively cheaper prices for Ukraine and Russia supplies, and Chinese consumers diversified preferences for Vegetable Oil, sunflower seed Oil imports are higher at 0.86 MMT in MY15/16 and are expected to remain strong in MY16/17.

  • Total Vegetable Oil production of Russia shot up by 38.54 to 284,000 tons during the month of August this year, according to official data.

  • Russian Sunflower Oil production advanced nearly 5% to 38.76 million tons during the 2015/16 season and the Sunflower Oil production almost doubles to 209,000 tons in the month of August, as per ministry information.

  • In 2016/17 MY the production of Russian Sunflower Oil will rise to 4.085 million tons, against 3.85 million tons last season.

  • Russian Sunflower Oil in the new season, the export potential is expected at the level of 1.64 million tons. Last season, the exports reached 1.42 million tons.

  • United States old crop Sunflower stocks in all positions on September 1, 2016 totaled 414 million pounds, up 74 percent from a year ago. All stocks stored on farms totaled 62.4 million pounds and off-farm stocks totaled 351 million pounds, according to USDA.

Outlook

  • Prices of Edible Oil complex is unlikely to see any major fall in the month as winter season demand is likely to support the prices during the month.

  • Traders are anticipating that the retail demand of Mustard Oil will improve after Diwali festival, but that could not happen as it was highly priced against other soft oil such as Soy Oil and Palm Oil, demand for Mustard Oil usually improves during winter season.

  • Weakness in Palm Oil prices may affect the Soy Oil in the near term but the long-term outlook is positive on expectation of demand shift from palm Oil. However, big upside for Soy Oil is not unlikely as price gap with Sunflower Oil is low.

  • Availability of domestic Soy Oil will be on higher side due to bumper Soybean crop. Soy Oil will be available at a far lower rate compared to Mustard Oil so demand may shift to Soy Oil in the future.

  • Supply of Oilseed from domestic market is rising which will ease concern about availability of Edible Oil which makes the outlook cautious.

  • Supply for Vegetable Oil will rise in coming months on expectation of good Soy crop from US and Sunflower in Ukraine.

  • Argentina Soy Oil (FoB) was quoted $783 per tonne for November shipment, while Ukraine Sunflower Oil was $785.

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