Edible Oil Market Update: Palm Bullish, Soybean Cautious, Mustard Range-Bound

Advisory Bazaar Info Services

Palm Oil

KLC gained around 4% last week, marking its strongest weekly rise in 24 weeks. Rising concerns over production have pushed prices close to the December 2024 highs. According to SPPOMA, Malaysian palm oil production is estimated to have declined 3.14% during August 1–20, while ITS estimates exports fell 5.5% during the same period.

Dry weather linked to El Niño could put further pressure on production in Q4. If November KLC sustains above RM5,000, prices could move towards RM5,200–5,500. In the domestic market, palm oil gained around ₹2–3/kg on strong KLC. Kandla RBD Olein faces key resistance at ₹1,480–1,500.

Soybean Oil

The possible extension of the 2025 RFS compliance deadline for refiners by the EPA has raised concerns over US biofuel demand and renewable diesel margins. CBOT soybean oil came under pressure following the news, with the December contract closing below the key 70 resistance.

Argentina soybean oil has important resistance near $1,220/tonne. A sustained move above 70 in CBOT and $1,220 in Argentina could support Kandla soybean oil towards ₹1,500. Estimated August imports of soybean oil are around 620,000 tonnes, which could limit the upside. However, its discount to palm oil may limit downside risk. Buying on dips for September requirements appears preferable.

Mustard Oil

Mustard oil traded in a narrow range last week. Demand remains subdued as the price gap with soybean and palm oil has widened, but tight mustard supply is limiting the downside. ₹1,700 remains a key resistance level.

Prices are near seasonal highs, so range-bound trade is likely in the near term. Maintain stocks according to requirements and avoid aggressive buying at higher levels.

Conclusion

Palm Oil: Bullish bias supported by production and weather concerns.

Soybean Oil: Cautious outlook; buying on dips is preferable.

Mustard Oil: Range-bound outlook with limited downside due to tight supply.