Palm Oil Prices to Drop as India may Curtail Imports.

AHMEDABAD : Indian imports of palm oil, second largest after China will mark a dent in the international prices as the domestic buyers are found to refrain from importing the high cost edible oil.

In a report by Bloomberg, Rajkot-based Govindbhai Patel informed that the traders have remained hesitant in buying from overseas markets as the global prices are ruling higher than domestic prices. “People are not buying, as global prices are high and there is disparity,” Patel was quoted as saying.

As per the Solvent Extractors’ Association (SEA) data, India imported 942,257 tonnes in the month of September, 2010, which is feared to fall as much as 36% in the wake of rising international prices.

Indian imports from Malaysia have fallen 21% so far during the past fortnight against September.

The oil prices on Malaysia Derivatives Exchange have scaled up to 26-month peak, leaving Indian importers in jitters. India, being one of the key markets for Malaysian palm oil, the reduced off take will put a downward pressure on the prices.

Further, Malaysian palm oil production is expected to rise in October, which will raise concerns about the rising stockpiles and will bring down prices.

According to market analysts, the imported crude palm oil prices hovered much higher than the domestic prices. The December-delivery prices for imported CPO stood at around Rs.450 per 10 kg against the local price of Rs.429 per 10 kg.

The disparity between the imported prices and local prices will play a key role in reducing imports and as the country is one of the prominent importer of crude palm oil, it will affect prices in the international markets.

Source : commodityonline.com