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Crude palm oil (CPO) futures on the Multi Commodity Exchange (MCX) tumbled 2 per cent and closed around ₹493 per 10 kg last week. A sharp fall in the Malaysian BMD futures and the CBOT soya oil futures dragged the CPO price lower. On the domestic front, inventories with the retailers have risen amid a surge in imports in the last two months ahead of the commencement of Ramzan festival season.
On the global front, the most active August 2017 BMD CPO futures fell during the week, tracking weakness in its rival CBOT soya oil market. CBOT soy complex market was under pressure due to rise in supply from Latin American countries.
For the coming week, the MCX-CPO contract is likely to trade on a moderately negative note on the back of weak oil seed and edible oil complex on the domestic front. With the timely arrival of monsoon in Kerala, the prices of edible oil, including palm oil, are expected to decline ahead of commencement of kharif sowing. Moreover, in the source nation, palm oil production starts picking up in the next one-two months, which may boost its supplies globally. However, any delay or unfavourable reports regarding the advancement of monsoon in the subcontinent may limit the decline.
The writer is Head, Commodity Research, Karvy Comtrade
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