To the astonishment of the food industry, India has granted import licenses for 1.1 million tons of refined palm oil. In January it was said that the import of this vegetable oil should be restricted.
A restriction on imports by India, the world's largest palm oil importer, has already put pressure on the prices of the palm oil futures on the derivatives exchange in Malaysia. Now the courses are correcting again.
India had put palm oil and palm oil on its list of outlawed imports after Malaysia criticized New Delhi's immigration policy. As a result, traders applied to the Directorate for Foreign Trade (DGFT) at least 100 import licenses for refined palm olein.
It was announced today that the GDFT issued 1.1 million tons of import permits. Interestingly, the requests were all for Indonesian origin. In the second week of January, the government in New Delhi called for a boycott of palm oil products from Malaysia after Malaysian Prime Minister Matathir Mohamad criticized India's immigration law for the Kashmir region.
The large volume of import permits for Indonesian palm oil surprised not only industry representatives, but also employees of the Ministry of Commerce. They expressed their displeasure and asked the DGFT not to issue any further permits for the time being.
Market participants assess the change in mindset in the import policy with rapidly rising prices for vegetable oils in India, which are also reflected in the stock exchange prices. New Delhi's palm oil imports fell 27% in January compared to January 2019 to 594,804 tonnes.
In the previous marketing year, which ended in October 2019, India imported 9.4 million tons of palm oil, which also includes 2.72 million tons of refined palm oil. Almost 2/3 of all vegetable oil imports in India are palm oil. The world's two largest producers and exporters are Malaysia and Indonesia.
Source
HANSA Terminhandel
