Indonesia palm oil exports to India seen at record on demand
JAKARTA, Feb 5 — Palm oil exports from Indonesia to India, the world’s biggest buyer, will probably climb to the highest ever this year as strong demand counters higher import duties.
Shipments of palm and kernel oils to India climbed 32 per cent to record 7.6 million metric tons in 2017 from a year earlier, according to the Indonesian Palm Oil Association, commonly known as Gapki. Exports are likely to advance further this year to keep pace with the South Asian country’s population and economic growth, the association’s secretary general Togar Sitanggang said, without providing any estimate.
India, which relies on imports to meet about 70 per cent of its total vegetable oil requirements, doubled the levy on crude palm oil to 30 per cent in November and increased the duty on refined palm oil to 40 per cent from 25 per cent. The move, coupled with high inventories in top producers Indonesia and Malaysia, resulted in palm oil prices dropping 19 percent last year.
“India’s import duty hike will likely be temporary,” Sitanggang said in text messages. “Now they feel they need to protect" their farmers and local output from imports. That stand may change and the duty may be cut again to meet the country’s edible oil demand, he said.
India may also consider a request from Indonesia’s President Joko Widodo to reduce the levy, said Derom Bangun, chairman of the Indonesian Palm Oil Board.
Palm oil futures for delivery in April fell 0.3 per cent to RM2,460 ringgit a ton on Bursa Malaysia Derivatives by 11.26am local time. The most-active contract has fallen 1.8 per cent so far this year.
Source: Bloomberg
