MCX CPO closed flat on Tuesday due to long liquidation by the market participants tracking weak trend in Malaysia Palm oil. Moreover, reduction on tariff values by government and higher stocks in the country weigh on prices. For the second half, the government reduced the base import price of all palm oils, with the steepest cut of $31 per tn for refined, bleached and deodorised palmolein, and crude palmolein.

As of Oct 1, India had 979,000 tn of edible oil in stock at ports, with an additional 16.1 lakh tonnes in the pipeline. According to SEA release, during Nov-Sep period, crude palm oil import is 57.34 lakh tonnes, up 9.5% from 52.34 lt during the same period of the previous oil year.

Outlook

We expect Ref Soy oil to trade sideways to higher on reports of firm international prices. However, good seasonal arrivals of oilseed, lower tariff value and higher imports of edible oil may keep the prices in range.

CPO futures may trade sideways on mixed fundamentals of firm International prices and higher stocks levels in the country. Lower tariff value, good festive demand and higher import duty for edible oil may keep the prices in a range.

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