Posts Tagged ‘palm oil’

MUSTARD/RAPESEED SEED

Mustard/Rapeseed oil is the third largest edible oil produced in the world after soy oil and palm oil with accounts of about 12% of the total World’s edible oil production. By crushing rapeseed or mustard seed, oil and meal are obtained. The average oil recovery from the seed is about 33%. The remaining is obtained as cake, which is rich in proteins and is used as an animal feed ingredient. Being an important source of edible oil and feed meal to the country, mustard is undoubtedly the focus of Indian edible oil industry. In EU, rapeseed oil is mainly used for biofuel production.

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Global scenario

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The production and consumption of this oil has been growing at the rate of 4.65% and 5.03% respectively over the last decade. According to USDA, global rapeseed output for 2010/11 is forecast 400,000 tonnes higher this month to 57.1 million as a larger crop in Canada. While world production of mustard oil is estimated to 20-22 million tonnes. Canada is the major producer and exporter of seed and oil followed by Australia. China, European Union, Canada and India are leading producers of mustard seed and consumer as well as. The major seed importing countries are Japan and Mexico and US leads the list of mustard and rapeseed oil importing countries. Global rapeseed exports are estimated 410,000 tonnes higher this month due to lower exports from Ukraine and Russia as record heat wave in August causes crop damage.

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Indian scenario

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The Central Organisation for OilIndustry and Trade, the apex trade body, estimated the country’s mustard seed output at 64.2 lakh tonnes in 2009-10 (October-September) as against 63.5 lakh tonnes a year earlier,
while oil is around 21 lakh tonnes in 2009-10. The country also generates 24 lakh tonnes of oil cake.

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Rajasthan, Uttar Pradesh and Haryana produce the major share of rape /mustard contributing to over 70% of the total Indian produce. The crop accounts for nearly one-third of the oil produced in India, making it the country’s second most important edible oil after groundnut. Mustard oil is consumed wholly in the domestic market. The demand for the consumption of mustard/rape seed comes mainly from eastern and northern areas of the country.


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Hence, India does not export mustard seed but imports some amount of oil. However India exports around 400,000 tonnes of oil cake. Recently due to the dominance of comparatively other cheaper oils like palm and soya, the import share has come down.

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Climatic conditions, especially progress of South-West monsoon is a major factor shaping the fortunes of  mustard seed. Price of other domestic and global oil seeds would also have significant bearing on mustard seed prices. Major trading centres  in mustard seed in the country are Jaipur, Sriganganagar and Alwar in Rajasthan, Hapur in UP, Delhi, Mumbai and Kolkatta.

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Outlook

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The mustard seed futures are likely to trade under selling pressure. Higher warehouse stock, poor buying interest, weakness in soy market, projection of record Kharif oilseeds production due to higher acreage and favorable weather condition is likely keep prices down. As on 13th September, NCDEX warehouses are
having a stock of 123,236 tonnes. Rise in volume, fall in open interest and price is indicating further weakness in the prices.

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MALAYSIAN PALM OIL……… “Feeding the Needy”

The oil palm development in Malaysia has been colourful. Starting off as ornamental, the crop has developed to the multi billion ringgit industry as what is witness today. It is grown on massive plantations in tropical nations, mainly Malaysia and Indonesia. Palm oil is a globally traded agricultural commodity that is used in 50% of all consumer goods,from soaps and detergents to breakfast cereals and bio-fuels.

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OIL EXTRACTION RATE: After experiencing declined of OER for three consecutive months, the national CPO extraction rates (OER) in June 2010 registered a further decrease of 0.25% to 20.19% as compared to 20.44% in the previous month. It was also recorded lower by 0.64% than June last year. The decrease in OER was related to excessive rainfalls received from South East Monsoon, in almost all states. Most plantations are suffering due to erratic weather conditions. Production in Sabah is probably going to be flat in July. Some of the older palm trees aren’t able to withstand the weather stress and produce fewer fruits

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PRODUCTION: La Nina, which brings above-normal rainfall in Asia, may add some concern about future production outlook & can disrupt palm oil production in Indonesia and Malaysia, the top growers.

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EXPORT SCENARIO: Malaysia’s palm oil exports in July reached 1.40 million to 1.41 million tons or 4.4%-4.7% higher than the June figures issued by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. Data from SGS showed Pakistan’s palm oil purchases from Malaysia rose twofold on month in July to cover demand for Ramadan, the Islamic holy month of fasting. Investors are tracking the impact of adverse weather conditions in China, a major vegetable oil consumer; they may step up vegetable oil imports if unfavorable weather hur t s domestic crops. Palm oil imports by India, dropped by 6%, as main summer season oilseed crop, started with the progress of the monsoon season.

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CLOSING STOCK OF MALAYSIAN PALM OIL: According to data from the Malaysian PalmOil Board, the stockpiles of Malaysian palm oil have been continuously decreasing. Palm oil stockpiles in Malaysia, the world’s second-biggest producer, touched a 10-month low of 1.45 million tons in June. The rise in Malaysia’s July palm oil exports may mean slight drawdown in inventory levels amid crop uncertainty.

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Currently, the market is juxtaposed between the factors of stronger ringgit & concerns of brewing La Nina weather event.

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SOYABEAN “Influenced by ………..”

Double digit food inflation has become a nightmare for Indian economy. Hot discussion is still on. But the question is how oil seeds will contribute in food inflation,  which is the major part of it and the second largest import item of India. What will be the price behavior of oil seeds in futures? Let us have a look.

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PAST YEAR MOVEMENT.

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If we have a look at the price movements of soyabean in the year 2009, it had started its yearly rally at around Rs 1900 per quintal with recovery in international palm oil and energy prices; it touched a yearly high of Rs 2824 per quintal. Smart recovery in international demand mainly from China and India coupled with crop loss in Brazil and Argentina played crucial role in giving upside to the international oilseeds and edible oil prices. Zero import duty on crude edible oil and very nominal duty on refined palmolein have favoured the import over domestic oils at the expenses of Indian oilseed producers and crushers.

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In the oilseeds complex, soybean futures gave the investors the second highest return of 21.86% after CPO at 28.03%.

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However, by the end of 2009, prices cooled off significantly and glimpsed a downside of and respectively.

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A ROAD TRIP TO CHINA………..

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In a very short time, China has built up what is likely the world’s largest soybean processing sector to produce soymeal & soyoil. U.S. has become.one of the major beneficiaries to satisfy the insatiable demand of China. China is the main driver of global soybean prices. The increasing demand.for animal protein in China & competing demand for its farmland, the country will not be able to increase its production & will have to import the.commodity to retain its huge appetite. China accounted for 79 percent of U.S. soybean exports in the week ended April 8,2010 according to a U.S.

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Department of Agriculture report. China is forecasted to account for 54 % of global imports of the oilseed, and 25% of purchases of the edible oil.this year, according to the U.S. Department of Agriculture.

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EXIM SCENARIO

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During FY09-10, the soy meal exports were lower as compared to previous year except the month of October due to higher export price. Soyabean oil imports may exceed last year’s 990,000 tonne as the premium for soyabean oil over palm oil contract., Soyabean oil costs $92.66 a tonne more than palm oil, according to Bloomberg data. The premium narrowed to $60.81 on March 31, the lowest since November 7, 2007, reducing the appeal of palm oil, its substitute.

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SEMINAR OUTCOME

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Based on the outcome of meeting at 31st All India seminar on rabi oilseeds & oil trade and industry on 12th March, 2010 at New Delhi, total soyabean production has been set lower for this year at 85 lakh tonnes. The marketable surplus for crushing is also estimated to be lower at 75 lakh tonnes. The peak oilseed crushing season is the second half of the financial year, in which mills sign most of their meal supply contracts with overseas agencies. The Advance estimates peg oilseed production at 26.32 million tonnes, as compared to 28.16 million tonnes in last year second advance estimate which is 1.84 million tonnes less than the earlier estimates for 2008-09. However, the resulting overall production of Rabi oilseeds is lower than the earlier year’s 2nd advance estimates of 2007-08 & 2008-09 respectively.

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PRICE ANALYSIS of CURRENT SCENARIO

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NCDEX soybean futures have always been tracking the futures at CBOT& BMD alongwith the oilseeds complex futures at both NCDEX & MCX. This year soybean futures prices have been trading downtrend to sideways, starting the year at 2382 levels to a contract low of 1966.00 levels registered a decline of 13.72 % at the NCDEX.

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At CBOT soybean futures hit a three-month high, upbeat economic data from China strengthened the outlook for U.S. agriculture export demand & tracking firm crude oil market. The current status at the NCDEX & CBOT future market for soybean is in backwardation condition, where the prices of the forth-coming contracts are trading lower than the current month. This reveals that the overall trend is still bearish for this commodity. The factors supporting the bearish trend are:

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•Lack of fresh fundamentals & poor export demand.

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•Subdued trading activity.

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•According to the Solvent Extractors’ Association of India, the soybean stocks as on 1st April is at 4.5 million tonnes.

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•Factors such as record output in Brazil and Argentina is limiting the rally.

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SO, WHAT NEXT?

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In short term, the soybean futures are expected to trade on a positive note due to short covering and fresh buying at lower levels. In medium term, the future market may get some initial strength, taking a support at 2000 levels & also from the lower dollar and higher crude oil prices. If crude oil prices continue to rise, production cost of soybeans likely will continue to rise, & these higher costs necessitate higher corn and soybean prices for farmers to be profitable. However, downside is expected to be limited based on recovery of soybean prices since the beginning of month of April.

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We can expect the futures to witness the level of 2400 in the months to come.

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Political will needed to contain pulse price rise

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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political will needed to contain pulse price rise

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Political will needed to contain pulse price rise –

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As part of measures to curb price rise, the planning commission has mooted the idea of encouraging formation of pulses grower’s federation which will trade on commodity future exchanges.

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The commission seems to believe such a trading plan will rein in price rise.

Stagnant acreage, low yields  and unsteady output have characterized pulse production for over two decades.

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On the other hand, demand for pulses has been rising steadily because of rising incomes and demographic pressure.

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In Other major Commodities Updates, we can read that palm oil climbed to the highest in more than seven months.

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Palm oil extends 2009 rally on crude oil rise –

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Palm oil climbed to the highest in more than seven months, extending the best annual gain in 12 years, as gains in crude oil prices increased its appeal as a substitute used in biofuels.

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Palm oil rallied 56 percent last year on rising demand from India and China, the top consumers, and amid tight supplies of soyabean oil because of drought in south America.

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Oil surged 78 percent in 2009, the biggest annual advance in a decade, and soyabean oil rose 21 percent.

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March delivery palm oil  gained as much as 1.2 percent to 2,696 ($788) a metric ton on the Malaysia derivatives exchange, highest since may 15 in intra day trading.

It traded at 2,690 ringgit at 5:13 local time.

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🙂

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