MCX CPO closed higher last week tracking good demand in the physical market and also helped by recent surge in international prices. The prices were also supported due to increase in tariff value for Crude palm oil and higher import duty also supports prices. The base import price of refined, bleached and deodorised palm oil has been increased by $49 a tn to $750 a tn and that of crude soyoil has been raised by $16 a tn to $851 per tn. Recently government raised import duty on crude palm oil to 15% from 7.5%, and on refined palm oil to 25% from 15%.

Outlook

We expect Ref Soy oil to trade sideways due to higher tariff values and good physical demand due to coming festival season. However, higher stocks in the domestic market may keep the prices in check.

CPO futures may trade sideways to higher on good festive demand and higher import duty for edible oil. Moreover, increase in tariff value too support prices. Higher stocks levels due to higher imports may keep prices sideways.

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