According to Angel Commodities, MCX CPO slipped to 2-week low on Tuesday due to technical correction and tracking weakness in Malaysia palm oil prices.
Angel Commodities' report on Crude Palm oil
MCX CPO slipped to 2-week low on Tuesday due to technical correction and tracking weakness in Malaysia palm oil prices. Currently prices are trading above 570 levels supported by good physical demand and higher tariff rate. In January, prices jumped close to 12% supported by increased tariff price by Government for of crude palm. Palm oil imports are expected to increase in January as well due to lowering import duty from Malaysia. According to SEA monthly update, CPO imports were up by 13.1% at 6.70 lakh tonnes in December. However, the Nov-Dec period the import volumes dropped compared to last year. According to USDA monthly report in December, India imports figures are unchanged at 10.5 mt, up 22% compared to past year imports. Domestic consumption for India is forecast at 10.6 mt, up 16.7% on year. India has cut import taxes on crude and refined palm oil from Southeast Asian (ASEAN) countries after a request from suppliers.
CPO futures expected to trade sideways to lower tracking weak international prices. Moreover, higher tariff value, weaker rupees and improving physical demand from the stockiest may further support edible oil prices. Need to watch out for import figures which may pressurize prices in second half of Feb.
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