NCDEX Soy Oil Jumps On Positive Global Cues: April 23, 2012

NCDEX  May soy oil futures traded higher on account of firm overseas market. Depreciation of INR against US dollar also provided support to the bulls as imports of edible oil would be costly. India imports about 50% of its total requirements of edible oils. 

The import of edible oils in the month of March 2012  is reported at 702,335 tons compared to 412,088 tons in March 2011 up by 70%. The overall import of edible oils during November 2011 to March 2012 was 3,705,739 tonnes compared to 3,024,496  tonnes i.e. up by 22.5%. Average crude palm oil import prices was 1172 per tonne (CIF) in the month of March at Indian ports, it was  higher than $1148 per tonne in February. 

However, crude soybean oil prices were 1283/tonnes in the month of March, slightly down as compared to 1285/tonnes in February. 

Malaysian palm oil stocks dropped below the 2-million-tonne mark for the first time this year, reinforcing views of a tight global supply amid a lower soy crop in  drought-hit South America. As per Intertek exports of Malaysian palm oil products for April 1-20 fell 5.6 percent to 8.44 lakh tonnes compared with 8.96 tonnes shipped during March 1-20. 

NCDEX Pepper Gains On Short Covering

Pepper spot prices remained steady to slightly firm owing to fragile demand from overseas buyers but buying by the local stockists led prices to settle 0.39% higher on Friday. Futures traced the spot prices settled 2.5% higher on Friday. 

There are reports that production in Vietnam, the largest producer of the spice is expected to be revised to 1.35 lakh tonnes as compared to the earlier estimate of 1.10 lakh tonnes.   

Total cash margin of 15% on the long side will be imposed on all running contracts and yet-to-be-launched contracts in pepper from April 03, 2012. For detailed reference please refer to the Circular No: NCDEX/RISK-017/2012/120. 

Exports 

According to the Spices Board of India, exports of pepper during April 2011- January 2012 rose by 49% and stood at 22,300 tonnes as compared to  14,950 tonnes in corresponding period last year. Month-on-month rise in the exports of pepper stood at 12%.  

According to Vietnam Ministry of Agriculture and Rural Development  (MARD) exports of black pepper in 2012 are forecasted to fall by 30 percent to around 86,000 tonnes. Vietnam shipped a record number around 17,000 tons in March alone, against some 14,000 tons in March  2010 and 15,000 tons in March 2011 (Source: Peppertrade Board).  

Pepper imports by the US during April to November 2011 surged marginally by 1.58% to 64,276 tonnes as compared to 63,274 tonnes during the same period in 2010-11. Indonesia remained the major supplier to the US in the above-mentioned period. 

Exports from Indonesia posted significant decrease of 42% as compared  to previous year. Exports stood at 36,500 tonnes as compared to 62,599  tonnes in the last year. 

During 2011, Brazil exported 32,676 tonnes of pepper, a rise of 6% as compared to 30,786 tonnes in 2010. The US remained  the major destination of the pepper imports, importing around 12,820 tonnes

Production And Arrivals 

Arrivals of pepper in domestic markets stood at 50 tonnes while offtakes were 30 tonnes on Friday. Global pepper production in 2012 is expected to increase 7.2% to 3.20  lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of  24% in Indonesian pepper output and in Vietnam by 10%. 

Pepper  production in Vietnam and Indonesia is projected at 1.10 lakh tonnes  while that in Indonesia is projected to be 41 thousand tonnes (Source:  Financial Express). 

Domestic consumption of pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012 (Source: Peppertrade Board).

On the other hand production of pepper in India in 2011-12 is expected decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is the lowest in a decade.