Indian soyaoil futures rose on Friday to hit their highest level in 13 months, bolstered by gains in overseas edible oil prices, a weak rupee and good demand in local spot markets due to a festival. Soyabean futures hit a four-month high on strong demand amid limited supplies.
Malaysian palm oil futures briefly rose to a fresh one-year high on Friday, as strong Asian demand coupled with lower production expectations supported prices. At 0857 GMT, the key November soyaoil contract on the National Commodity and Derivatives Exchange was up 0.90 percent at 755.60 rupees per 10 kg. It rose to 756.80 rupees earlier, the highest level since September 20, 2012.
"Cost of imports is rising due to a weak rupee and a rally in overseas palm oil prices," said Isha Trivedi, an analyst at Phillip Commodities India Pvt Ltd. "Soyaoil supplies are also not rising as per expectations. Oil mills are not getting enough soyabean to operate plants with full capacity."
The key November soyabean contract rose 0.13 percent to 3,920 rupees per 100 kg, after rising to 3,934.50 rupees earlier, the highest level since June 20. The rapeseed contract for November was up 1 percent at 3,834 rupees per 100 kg. India's soyabean production in 2013/14 is likely to drop by 4.4 percent from the previous year to 10.23 million tonnes after heavy rains in growing areas during the harvest season damaged the crop.
A weak rupee makes edible oil imports expensive, but raises returns of oilmeal exporters. The rupee fell on Friday. At the Indore spot market in Madhya Pradesh, soyabeans edged up 4 rupees to 3,850 rupees per 100 kg, while soyaoil rose by 7.70 rupees to 749.50 rupees per 10 kg. At Jaipur in Rajasthan, rapeseed edged down one rupee to 3,824 rupees.
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