Argentina crisis tightens soya supplies; rising vegetable oil prices may slide

Aarti Shetty

Mumbai, Jan 6: Even as Argentina awaits with bated breath for the news on the imminent 30 per cent devaluation of the Argentinian peso, soyabean oil prices in the international market have jumped by around $20 per tonne over the past two days.

However, a section of importers say that soyaoil prices are likely to slide over the next couple of days, if the Argentinian peso is
devalued.

This will make soyaoil exports from Argentina cheaper. Expecting this, the Chicago soyaoil futures which had bottomed out earlier,
have risen by around 29 points on January 4 amidst speculation.

Soyabean oil is currently quoted at $412 per tonne, up from $393 per tonne quoted on January 3.

The increase in the soyaoil prices has reflected directly on the domestic prices of soyabean oil.

Ten kgs of refined soyaoil was quoted at around Rs 296 on January 3, which is currently up by around Rs 9 to be quoted at Rs 305 per 10 kgs.

Responding to soyaoil price increase, Malaysia and Indonesia have followed suit by incorporating approximately $10-13 per tonne hike in the palm oil prices.

Importers attribute the increase in soyaoil prices to the tightening of soyaoil supplies in the international market.

A Mumbai-based importer said, "Soyaoil supplies in Argentina are more or less contracted and with Brazil not having much to offer, supplies of the oil has tightened sending prices upwards".

Importers say that the price increase in palm oils is due to the draw down of palm oil stocks in Malaysia. Stocks are expected to go down marginally by January end and will be at their lowest in February.

Further, after an average export performance in November 2001, December proved to be a comparatively better month for Malaysia in term of exports of palm products which in turn influenced the prices.
Also, India’s vegoil output from the kharif oilseed crop will be on the downslide, beginning Jan end.

A palm oil broker said, "To compensate the demand-supply gap, India will be looking at more palm oil imports which has prompted Malaysia to increase their prices".

Domestically, RBD palmolein was quoted at around Rs 304 per 10 kgs on Jan 4, up from Rs 295 on Jan 3.

CPO prices also increased marginally by around Rs 5 per 10 kgs to be quoted at Rs 255 per 10 kgs on Jan 4, from Rs 250 per 10 kgs on Jan 3.

One tn of RBD palmolein, which was quoted at $332.5 on Jan 3, was up around $13 yesterday to close at $345 per tonne.

Similarly, crude palm oil (CPO) prices increased by around $2.5 per tonne to be quoted at $300 per tonne yesterday from $297.5 per tn quoted on January 3.