India is lowering import duties on palm oil and palm oil products from the ASEAN countries of Southeast Asia at the request of importers. This was revealed this morning by government sources in Mumbai.
The lower duties will lead to higher imports by India, the world's largest importer of vegetable oils, in the coming months as the price differential between the tropical oil and soybean oil and sunflower oil widens.
Higher palm oil imports will support prices in Malaysia, which had already risen by 44% in 2019. With immediate effect, import tariffs on crude palm oil will be reduced from 40% to 37.5% and refined palm oil from 50% to 45%.
Malaysia and Indonesia are part of the ASEAN group (the Association of Southeast Asian Nations, or ASEAN for short, is an international organization of Southeast Asian states based in Jakarta).
India depends on imported vegetable oils for 70% of its production. In 2001/02, the figure was 44%. Two-thirds of imports, or around 15 million tons, are palm oils. In November, imports fell by 3% compared to the same month last year, the lowest level in 17 months.
Indonesia and Malaysia, the two largest palm oil producers in the world, are currently trying to reduce their stocks.
Palm oil competes in India with soybean oil and sunflower oil. Soybean oil is mostly sourced from Argentina and Brazil and sunflower oil from Ukraine and Russia. These higher quality oils are generally 10% more expensive. Now the gap is widening in favor of palm oil.
Source
HANSA Terminhandel
