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Informist, Friday, Sep 20, 2024

 

--Godrej Mistry: Global rapeseed oil prices up on lower production 

--CONTEXT: Godrej International Director Dorab Mistry at Globoil India 

--Godrej Mistry: Soft crude oil prices biggest problem for veg oils 

--Godrej Mistry: Sentiment for palm oil prices has turned bullish 

--Godrej Mistry: Soybean output in Brazil, Argentina, US high this yr 

--Godrej Mistry: Expect sunflower oil prices to rise after March

 

MUMBAI – Crude palm oil prices on the Bursa Malaysia Derivatives are expected to rise to 4,500 ringgits per tn by June 2025, up 14% from the current level, according to Dorab Mistry, edible oil analyst and director of Godrej International. The most-active November contract of crude palm oil on the Malaysian bourse was 3,948 ringgits per tn today.

 

"We have been very lucky so far in 2024. The growing weather in most parts of the world in 2024 has been either good or ideal and we have seen that in India," Mistry said at Globoil India.

 

India is one of the largest importers of edible oils. Palm oil accounts for a bulk of the total imports and most of it is bought from Indonesia and Malaysia. India's vegetable oil imports declined 16% on year to 1.56 mln tn in August, the Solvent Extractors' Association of India said in its monthly update. The vegetable oil imports in August consisted of 1.53 mln tn of edible oils and 27,100 tn of non-edible oils, the association said. Edible oil imports in August fell 17% on year.

   

"I think there is going to be immediate pressure post-Diwali in the palm oil market, but January onwards we will start a new bull market," Mistry said. This is also because of seasonally low production, festivals like Chinese New Year in January, and Ramzan starting from early March, he added.

 

Usually, at the start of each year, palm oil production shrinks because of seasonality. "Palm oil production is always lowest in February and March, so because of that, quarter one is one of the supercharged quarters," Mistry said.

 

On rapeseed or mustard, he said lower world crop production and fewer carryover stocks are likely to support prices.

 

According to International Grain Council's forecast, the 2024-25 wold rapeseed output is projected at 87.2 ml tn, down 2% from last year due to reduced production areas and lower yields.

 

In the case of soy oil, Mistry said that production in the year so far has been excellent, with bumper soybean crops in South America and the US. The US Department of Agriculture projected that global soybean output was up on the month in September by 47,000 tn to 429.20 mln tn.

 

"Soyoil has been dependent on biofuel demand, and it also looks very attractive as a buy today," Mistry said. Hence, Mistry believes that on the Chicago Board of Trade, soyoil futures will continue to benefit from the brisk US biodiesel demand.

 

"The connecting bridge between vegetable oils and biofuels, crude oil, is very important, but due to its soft prices, it is the biggest problem for vegetable oils," Mistry said. Crude oil prices have fallen nearly 25% to $71.50 per barrel from a 52-week high of $95.03 per bbl.

 

The outlook for sunflower seeds is most bullish for early 2025 because of supply tightness and lower crops in Ukraine and Russia.

 

Any change in India's import duty this year or next year will be a key factor in determining palm oil prices, Mistry said. 

 

The Indian government last week sharply raised the basic import duty on crude and refined edible oils to 20% and 32.5% from nil and 12.5%, respectively, to promote domestic cultivation of oilseeds.  End

 

Reported by Anjali Lavania and Sandeep Sinha

Edited by Ashish Shirke

 

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