MCX CPO (Crude Palm Oil) closed higher tracking firm edible oil prices in International markets. However, higher supplies in the domestic market keeping the pieces in tight range. The prices have been supported at higher levels due to increase in tariff value for the first half of October. The government increased the base import price of all palm oils, with the steepest hike of $30 per tn for refined, bleached and deodorised palm oil. The base import prices of refined, bleached and deodorised palmolein, and crude palmolein were raised by $28 per tn each.

Malaysia's palm oil shipments during Sept were about 10 % up and expectations are that production will top demand in the same month so that ending stocks may grow.

Outlook

We expect Ref Soy oil to trade sideways to higher on expectation of good physical demand as prices have dropped last week. There is steady physical demand and higher stocks in the domestic market. However, higher tariff values and good physical demand due to coming festival season is keeping the prices supportive at current levels.

CPO futures may trade sideways to higher on good festive demand and higher import duty for edible oil. However, higher stocks levels due to higher imports may keep prices sideways.

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