Market Review (21th Oct 2011 to 05th Nov 2011)
Refined soya oil prices remained range bound in the domestic market tracking the firm global cues amid reduced arrivals in the spot market. Refined soya oil Spot market closed at 630.50/10 kg with loss of Rs. 7.40/10Kg.
A lack of fresh fundamental news and mixed signals from external markets promoted a choppy trading atmosphere in refined soya oil. Traders were cautious amid global economic uncertainty, with lagging export demand leaving it with an underlying bullish theme meanwhile rising supply in the physical markets on the back of fresh arrivals from the producing areas has put a check on prices. On the fundamental front, China is expected to speed up its buying in near future. Sowing process in the Latin American countries i.e. Brazil and Argentina is going on with full speed.
On domestic front, the Soybean Processors Association of India (SOPA) revised soybean production in 2011-12 to 11.93 million tonnes against earlier estimate of 11.65 million tonnes. As per the latest release from the Ministry of Agriculture, sowing of rabi crops has begun in some states. According to preliminary reports, oilseeds have been sown in 32.75 lakh hectare area higher by 0.53 lakh hectare from the last year. Arrivals were around 5 lakh bags in major mandis of Madhya Pradesh, 3 lakh bags in Maharashtra and 2 lakh bags in Rajasthan. Arrivals from the fresh crop supported the prices at lower levels.
According to The Solvent Extractors' Association of India the export of oilmeals for the month of October 2011 and reported at 353,300 tons compared to 498,159 tons in October 2010. The export of oilmeals during April-October 2011 is reported at 2,387,417 tons compared to 1,874,368 tons during the same period of last year i.e. up by 27%. During current oil year 2010-11 (Nov.'10 to Oct. '11) export of oilmeals increased due to Sharp increased in oilseeds production during current year (2010-11) compared to previous year (2009-10). Increased availability of oilseeds lead to higher crushing and production of oil and meals for domestic and export as well as good crushing parity due to high price of oils and export demand for oilmeals.
Market direction has been driven by developments in Europe as a slowdown in the region's economy would likely hurt commodity demand. The outlook for edible oil and oil seed complex is expected to remain weak on increasing domestic arrivals post festivals. USDA is saying beans are 80% harvested vs. 91% a year ago and a 5 year average of 71%. That means that we are ahead of the five-year average but still behind last year's pace. The weather is still favorable and should see this good pace continue. Soya oil prices are also getting support from the strength in crude. The market is continuing to focus on Europe. India imported increased quantity of edible oil during September to meet its domestic demand. Now it is expected that fresh crushing will help increase in domestic availability.