Palm oil prices continued to rise after Indonesia said it would stop exports later this month. Palm oil futures for July delivery rose 6% to 6,738 ringgit ($1,550) per tonne in Kuala Lumpur. Indonesia accounts for about 60% of the global palm oil supply. The sanctions threaten to further increase global food inflation, which has been intensifying since the war in Ukraine began.
Many countries including India are dependent on imports bribe As a cheaper alternative to the more expensive soybean and sunflower oils. Indonesia will halt exports from April 28 to deal with rising domestic prices. The easing of COVID-19 restrictions has increased the demand for vegetable oils for food and biofuels.
60 per cent of India’s edible oil requirement is met through imports, while refined palm oil imports account for over 30 per cent of the country’s total palm oil imports, In February, the Indian government approved crude palm oil ( CPO) cut its tax on imports. As the world’s largest edible oil importer 7.5% to 5%, seeks to rein in local commodity prices and help domestic refiners and consumers.
Analysts have indicated near-term pressure on both supply and prices of products including packaged foods and edible oils after Indonesia’s sudden export ban on palm oil.
“The unorganized sector may face severe constraints, but given the tough demand environment, listed players face exposure to earnings on demand and margins- Hindustan Unilever Ltd (HUL), Godrej Consumer Products Ltd. GCPL), and packaged foods have the highest exposure.” Jefferies said in a note on Sunday.
Vegetable oil imports rose 13% to over 11 lakh tonnes in March on higher shipments of edible oil, according to industry data. The Solvent Extractors Association of India said that imports of vegetable oils (including edible oils and non-edible oils) stood at 11,04,570 tonnes in March 2022 as compared to 9,80,243 tonnes in March 2021.
Edible oil imports increased to 10,51,698 tonnes in March 2022 from 9,57,633 tonnes in the year-ago period, while non-edible oil imports increased to 52,872 tonnes from 22,610 tonnes during the period under review.
The total import of vegetable oils during the first five months of the oil year 2021-22, November 2021-March 2022 was recorded at 57,95,728 tonnes as compared to 53,75,003 tonnes during the corresponding period of the previous year. (with agency input)