The prevailing dry weather in main oilseed growing states including Madhya Pradesh, Gujarat and Maharashtra had increased edible oil prices on Monday, according to a BL report. Rainfall has been 24 percent below average so far this season. Edible oil prices in the spot market were also up following a firm trend in global markets, noted the report.
What is more, dry weather in the US also pushed up prices at the Chicago and Malaysian futures markets, said the report. Malaysian BMD CPO (crude palm oil) futures closed higher, tracking gains for Chicago soya oil and could rise further as the premium of soya oil over palm oil has gone up to $ 180 a tonne, the report pointed out. The price difference may drive cost-conscious buyers to shift demand to cheaper palm oil.
The Indian rupee fell to near a record low. A weak rupee makes edible oil imports expensive forcing domestic refiners to raise the rate. Burgeoning demand for palm oil ahead of the fasting month Ramadan in July-end also added to the bullish mood in the market, said the report and added that the demand might as well stay robust due to the forthcoming festivals.