Spot prices of major edible oil including refined soya oil and RBD palm oil are expected to go down in the next few days on expected heavy inflows of imported edible oil into the country by month-end amid steady demand.
Refined soya oil April contracts in NCDEX on Thursday hit 3% lower circuit and traded lower by Rs 19 at Rs 581.30 per 10 kg till 5 pm on increased offerings by operators amid profit-taking on the news that government will increase supplies of edible oils through imports to keep prices under check.
“I think about 3.5 lakh tonne of crude palm oil (CPO) from Malaysia are expected to arrive in the next few days. Spot prices have come down today on the news that government plans to import one million tonne soon. Prices may fall as supplies improve,” a local dealer said.
Edible oil import increased by 33% to 4.21 lakh tonne in March 2008 from 3.18 lakh tonne in March 2007.
“Despite increased inflows of imported oils due to duty cut, local refiners have not so far passed on the benefits to the consumer as current landing cost of imported palmolein is around Rs 530 plus tax whereas local refiners are selling palmolein at Rs 570, leaving a difference of nearly Rs 40. On the other hand, there is no price parity in soya oil degummed imports,” a leading importer said.
Market sources said that PEC on Thursday bought about 24,000 tonne of Palmolein around $1,330-1,336 a tonne on CIF basis for May shipment and nearly 25,000 tonne of soya oil degummed around $1,446 per tonne on CIF for May shipment, sources said. Imported oil will be sold at a subsidized rate of Rs 15 a litre throughout the country, sources said.