25/10/2007 (The Economic Times), Mumbai - Edible oilseed and oil prices are ruling firm in spot and futures market due to festive demand and demand from millers in addition to firmness in the international market. Meanwhile, high petroleum prices has scaled up freights rates that may decrease edible oil imports so that there is a overall bullish sentiment driving up the price.

Refined soya oil prices have gone up by Rs 6-7 per 10 kg to Rs 484, excluding taxes, in the past four days, sunflower seed oil has gone up from Rs 605 to Rs 615. Rape mustard seed oil, however, have remained steady at Rs 494-495 per 20 kg levels but has gone up on Wednesday. In the futures by 4.35 pm, soya oil November futures on NCDEX were up at Rs 493 per 10 kg against the previous close of Rs 488 while rape mustard seed futures were up at Rs 468 against previous close of Rs 463.

The Solvent Extractor’s Association president Ashok Sethia said reports about additional biofuel plants coming up in US and Europe, which are expected to divert vegetable oil towards bio fuel, have triggered bullish sentiments. He added that even the high freight rates are expected to bring down the imports in the next 2-3 months.

“Vegetable oil imports are normally low in few months during the domestic arrival season but this year, imports in these months can further go down with rise in freight cost,” Mr Sethia said. On an average, the country imports 4.5-5 lakh tonnes of vegetable oil every month.

Even the spot NCDEX soya bean prices are moving up and on Wednesday, prices ex Indore moved up from Rs 1,616 per quintal to Rs 1,653 while soya oil prices have moved up from Rs 487.9 per 10 kg to Rs 494. A trader in edible oil said that refined soya oil prices have moved up from Rs 498 per 10 kg to Rs 506 , including taxes, in the past three days and are expected to go further up by Rs 1 per kg till Diwali, as there is more demand as compared to supply.

“Prices will be range bound and may move down only after Diwali depending on domestic availability of oil once crushing starts,” he said.

Kotak Commodities’ Amol Tilak feels that major upside in the edible oil will not be there with local crushing season and government directing the public sector agencies to import edible oil. Mr Tilak said that firmness in futures market on Wednesday was because of firm closing of soya oil futures in CBOT while the Indian spot market was also up.