Edible Oil Market Report

Advisory Bazaar Info Services

Palm Oil

Malaysia’s palm oil stocks are likely to rise 4.9% to a seven-month high. Higher prices and weak exports are encouraging importers to shift their preference toward soybean oil. According to a Reuters survey, palm oil exports in August are estimated to have declined 5.2%.

Fundamentals remain weak, although weather-related concerns and biofuel demand could provide support to the market. KLC November is currently trading in a limited range of 4,900–5,050. 4,780 is a strong support, while 5,050 remains a key resistance. A sustained move above 5,050 could trigger fresh upside.

India’s palm oil imports in August increased 6.71% to 780,000 tonnes, while stocks at the end of the month rose 25% to 378,000 tonnes. With sufficient stocks and normal demand, palm oil prices are likely to trade in a limited range in the near term. Declines may be considered as opportunities for long-term buying.

Soybean Oil

CBOT soybean oil declined 2.70% last week. Weak biofuel demand and concerns over U.S. renewable fuel policies are keeping the market under pressure.

CBOT soybean oil is currently trading in the 65–72 range, with 65 acting as strong support and 72 as key resistance. Kandla soybean oil is near the 1,420 support level, which could be an attractive level for forward buying.

Soybean oil prices declined by around ₹2–3/kg during the week. Rising imports and discussions over a possible duty cut have affected retail demand. In the near term, another ₹1–2/kg decline is possible, after which forward buying may be considered.

Mustard Oil

Mustard oil is currently witnessing limited volatility. Weakness in soybean and palm oil has increased the premium of mustard oil. The price gap between soybean oil and mustard oil has widened to around ₹27–28/kg, limiting the scope for a sharp rally in mustard oil.

However, given the tight supply of mustard seed, a decline of more than ₹2–3/kg also appears unlikely. Therefore, a need-based buying strategy remains preferable at present.

Mustard arrivals were around 650,000 tonnes in August, while crushing stood at approximately 800,000 tonnes. At the beginning of September, farmers held around 3.072 million tonnes, while processors and stockists held approximately 1.125 million tonnes. Total available stocks are estimated at around 4.225 million tonnes, more than 10% lower than last year.

The key mustard demand season is still ahead, while availability remains limited. Therefore, in the near term, the possibility of a major move of more than ₹150–200/quintal in either direction appears limited.