Mumbai: Indian soyoil futures fell on 2 November in tandem with rival Malaysian palm oil, and hastened by market talk the government may cut import duty on edible oils to rein in prices.
At 2:05 p.m. (0835 GMT), the November futures contract on the National Commodity and Derivatives Exchange was down 0.71% at Rs504.85 ($12.83) per 10 kg.
Traders said there was profit-taking after prices had risen 4.3% over the past 10 sessions. Firm crude oil prices had also contributed to the surge as soyoil could be diverted for use as biofuel.
Demand for edible oils usually climb ahead of Diwali, the festival of lights, which is celebrated at the end of next week and there has been market talk the government may cut import duty, analyst Veeresh Hiremath at Karvy Comtrade Ltd said.
India, one of the world’s leading edible oil buyer, imports palm oil from Malaysia and Indonesia and soyoil from Argentina and Brazil. It buys around 40% of its annual consumption of 13 million tonnes.
In July, India had reduced import duty on crude palm oil to 45% from 50%; and to 40 % from 45% on soyoil. Palm and soy oils compete for similar markets and their prices often move in tandem.
By midday break, January palm oil futures on the Bursa Malaysia Derivatives Exchange fell 45 ringgit to 2,885 ringgit ($864) as crude oil prices eased.