Edible oil futures touch record highs

Edible oil futures touch record highs
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First Published: Mon, Feb 25 2008. 10 37 PM IST
Updated: Mon, Feb 25 2008. 10 37 PM IST
Mumbai: Indian oilseeds and edible oil futures touched life highs on Monday tracking bullish demand from China, which is expecting a lower rapeseed (Canola) crop this year, and on gains in the global markets and crude oil.
The rapeseed July contract breached the initial daily price limit of 3% to touch a contract high of Rs612 per 20kg. Soybean April contract touched a new high of Rs2,321 per 100kg, while soyoil April futures rose to a fresh high of Rs666.3 per 10kg. Soybean and rapeseed are crushed to produce edible oil and oilmeal, which is used as cattle and poultry feed.
“China is the main reason for the bull run in all the major markets across the world,” Ravi Bhushan, an analyst with ICICI Direct, said.
The harsh winter weather in China damaged rapeseed crop and the country’s top planning body forecasts a fall of 200,000 tonnes on the year.
The benchmark contracts of soyoil and soybean had risen more than 5%, while the benchmark rapeseed contract rose 4.6% last week and touched new highs on most of the days.
“Indian prices are being guided by the international situation, which is very tight at the moment... It may not ease anytime soon,” said Vijay Shrishrimal, managing director of Itarsi Oils and Flours Ltd, a soybean processor and refiner. “Crude oil prices continue to remain bullish creating demand for biofuel from oilseeds,” he added.
Analysts said the Indian market may take a breather before the Union Budget this Friday on expectations the government may take steps to curb rising edible oil prices.
“Government will take steps to curb rising prices, which may be in the form of abolishing value-added tax (VAT) or reducing import duty on edible oils or doing both,” Bhushan said.
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First Published: Mon, Feb 25 2008. 10 37 PM IST