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FUNDAMENTAL HIGHLIGHTS

 *  The Securities and Exchange Board of India asked exchanges not to launch new contracts of some farm commodities, including those of soybean and its derivatives, and crude palm oil. The restrictions come into effect immediately and shall be applicable for one year.

* Malaysia's crude palm oil output fell 11.3% on month to around 1.5 mln tn in December, according to data from the Malaysian Palm Oil Board. Exports of palm oil in December fell 3.5% on month to 1.4 mln tn, and outbound shipments of biodiesel sharply fell by 76.6% on month to 13,371 tn. Total palm oil stocks in the country decreased 12.9% on month to around 1.6 mln tn as on December-end.

* Malaysia's crude palm oil exports during Dec 1-15 were down at 158,650 tn from 302,584 tn the previous month.

* The Solvent Extractors' Association has requested the government to cut the Agriculture Infrastructure and Development Cess on crude palm oil to 2.5% from 7.5% to ensure the duty difference between CPO and refined, bleached, and deoderised palmolein is restored to 11%, it said in a release.

* India's vegetable oil imports fell 9.6% on year to 1.23 mln tn in December, the SEA. Vegetable oil imports for Nov-Dec were at 2.40 mln tn, against 2.46 mln tn in the same period last year. Edible oil imports were nearly at 1.22 mln tn in December against 1.33 mln tn a year ago, and for Nov-Dec the edible oil imports were at 2.36 mln tn, as against 2.41 mln tn year-on-year. In December, import of crude palm oil was at 528,143 tn, as against 748,006 tn during the same month previous year. The recent spread of the Omicron variant has resulted in a decline in demand from bulk buyers and subsequently reduced imports. As on Jan 1, 580,000 tn of edible oil was at ports, against 630,000 tn from a year ago, while 1.14 mln tn in the pipeline against 1.19 mln tn during same period last year.

* The government has reduced the basic import duty on refined, bleached, and deodorised palm oil, to cool domestic prices, the finance ministry said in a notification. The new duty rates will be in place till Mar 31, the ministry said. The effective basic import duty on refined, bleached, and deodorised palm oil has been reduced to 12.5% from 17.5% earlier. With the new duty cut, the duty difference between crude palm oil, which is a raw material, and refined, bleached, and deodorised palm oil, which is the finished product, has reduced to 5.5% from 11.0% earlier.

* India's oilmeal exports fell 51.1% on year to 162,442 tn in November, according to data released by The Solvent Extractors' Association of India. In Apr-Nov, overall exports of oilmeal were at 1.59 mln tn, down 18.2% on year. Soymeal exports fell drastically to 42,951 tn in November compared with 198,776 tn in the same period last year because the Indian variant is priced higher in international markets. In November, mustard meal exports fell about 6.0% on year to 42,383 tn, while exports of castor meal were down nearly 22.5% on year at 28,876 tn.

* The Centre cut basic duty on crude palm oil, crude soybean oil and crude sunflower oil from 2.5% to nil The agri-cess on these oils has been brought down from 20% to 7.5% for crude palm oil and 5% for crude soybean oil and crude sunflower oil, the Finance Ministry said. The basic duty on RBD Palmolein Oil, Refined Soybean and Refined Sunflower Oil has been slashed to 17.5% from the current 32.5%.

* The government has imposed stockholding limits on all edible oils and oilseeds till Mar 31, according to an official notification.

* The government slashed import duty on key edible oils, including crude and refined soyoil, palm oil, and sunflower oil, in a bid to cool domestic prices. The new duty rates will be in place till Mar 31, the ministry said. The effective import duty on crude soyoil and sunflower oil has been reduced to 5.5% from 24.75%, while that on crude palm oil has been cut to 8.25% from 24.75%. The effective import duty on refined soyoil and sunflower oil and RBD palm oil and palmolein has been cut to 19.25% from 35.75%.

* The government plans to increase the area under oil palm trees by 14% to 404,000 ha in 2021-22 (Apr-Mar), with an aim to ramp up domestic edible oil production, according to farm ministry.

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