Edible Oil Weekly Report

Advisory Bazaar Info Services

KLC (Palm Oil)

• Last week, KLC closed with a 0.30% gain.

• Strong opening trade, but weakness appeared during mid-day trading.

• Production remained below expectations while exports stayed strong.

• China’s anti-dumping duty on canola oil has shifted demand toward palm oil.

• After the EPA granted exemptions to small refiners, CBOT soyoil strengthened.

Outlook

• A correction is possible in the first 10–15 days of September.

• Strong recovery expected by Diwali.

• Import parity shows a disparity of ₹3/kg; palm oil may reach ₹1250–1260.

• Advice: Use the recovery to clear existing stocks. Wait until September 1–15 for Diwali-related buying.

CBOT (Soybean Oil)

• Closed last week with a 3.5% gain.

• Strength came after news of exemptions for small refiners from blending requirements.

• EPA has not clarified whether larger refiners will compensate for the exemption, so the news is not entirely bullish.

• Imports in July rose 37% to 492,000 tons.

• Imports in August are also expected to remain high.

• Currently, import parity shows a disparity of ₹2–2.5/kg.

Outlook

• Soybean oil may rise by another ₹2–3/kg.

• Profit-booking is advisable at higher levels.

• Wait for a correction between September 1–15 for Diwali buying.

• Long-term buying is suggested near ₹1200, with a potential target of ₹1300 by Diwali.

Mustard Oil

• Fell by ₹2–3/kg last week.

• Demand remains weak compared to other oils.

• Large price gap with soybean oil; demand will only improve if soybean oil rises further or mustard oil falls by another ₹4–5/kg.

• Weak crushing may reduce supply, raising concerns of shortage during festive season.

Outlook

• Mustard oil may fall another ₹4–5/kg from current levels.

• Recovery expected from lower levels till Diwali.

• Buying is advisable only after mid-September.