The rupee depreciating against the US dollar from the current Rs 69.90 was a bigger concern, feels Angshu Mallick, deputy CEO, Adani Wilmar. Higher crude oil prices may impact bio fuel and this could in turn affect edible oil too. However, firm crude oil prices led to a weaker rupee, making imports costlier. “We have to watch the situation, see if the rupee depreciates further. However, in the past, we have seen that even when brent prices touched $80 a barrel, palm oil prices remained stable as production was good and prices stable,” said Mallick.
Given the mounting pressure on the Indian rupee, traders and importers will rush to cover their dollar positions, said Sandeep Bajoria, chief executive officer of oil consultancy firm Sunvin Group. “We have a bumper mustard crop and there is adequate palm oil inventory in Indonesia and Malaysia, but we have to watch crude prices and the rupee against the dollar,” he said.
Brent crude prices rose by almost 1.86 per cent to a four-month high of $73.83 per barrel on Monday.
“With the US expected to announce that all buyers of Iran oil need to end their imports soon or face sanctions, we expect Brent crude oil price to test $78 to $80 per barrel. This can likely impact bio fuel and edible oil prices too,” said Anuj Gupta, deputy vice-president of commodity research at Angel Broking. Iran is the second largest producer among the Opec.
NCDEX refined soyaoil May contract rose 1.2 per cent to Rs 735 per 10 kg from last week’s close of Rs 726.75 per 10 kg. On the MCX, crude palm oil touched a high of Rs 545.60 per 10 kg, up 0.4 per cent on Monday for April delivery. The rupee also depreciated 0.28 per cent to 69.5840 levels from last week’s closing of 69.39.
India imports nearly 70 per cent of its annual consumption of edible oil which is at 23.5 million tonnes. Palm oil is the most consumed edible oil in India with a share of 40 per cent, followed by soyabean and mustard oil.
Palm oil is imported from the world’s top two producers, Indonesia and Malayasia, followed by soyabean oil from Argentina and Brazil, sunflower oil from Ukraine and Russia and canola oil from Canada.