Competing efforts by leading palm oil producers Indonesia and Malaysia to raise exports of the tropical oil and the impact of falling crude oil prices on biodiesel demand will be the primary focus of an industry conference in India this week.
At the Globoil India 2014 meeting that starts in Mumbai on Friday, edible oil traders and analysts are also likely to discuss rising palm oil inventories and an expected bumper US soybean crop, and the combined impact on palm oil prices that dropped to a five-year low early this month.
"The market is oversupplied. Industry officials are keen to know the impact of competition between Indonesia and Malaysia to export more palm oil by reducing export taxes," said B.V. Mehta, executive director of the Mumbai-based industry body Solvent Extractors' Association of India (SEA).
Malaysia, the world's second biggest palm oil producer, has allowed duty free exports of crude palm oil for September and October, and rival top producer Indonesia is likely to respond with the same export incentive from October.
"I don't think anyone would be bullish at the conference," said a Mumbai-based dealer with a global trading firm.
Both Malaysia and neighbour Indonesia set export taxes on a monthly basis. Prior to its announcement, Malaysia's export duty for crude palm oil was set at 4.5 per cent for September, down from 5.0 per cent in August. Indonesia set its September rate at 9 per cent compared to 10.5 per cent in August.
The competition between the producers could depress palm oil prices and make it more attractive over other edible oils like those from soybeans and sunflowers, said the Mumbai-based dealer.
"Indian and Chinese importers ... are getting edible oils at lower prices during their peak consumption period," the dealer said.
India's vegetable oil imports typically peak between August and October when Indians celebrate a number of festivals and consumption of fried and calorie-laden food rises.
Top edible oil importer India shipped in a record 1.3 million tonnes of vegetable oils in August.With Brent crude falling to its lowest in more than two years this week, traders and analysts will also be looking for any clues to the impact on biodiesel demand, said Faiyaz Hudani, associate vice president at Kotak Commodity Services.After hitting a five-year low at 1,914 ringgit on Sept. 2, palm oil futures have climbed back to 2,193 ringgit on Thursday.
Source:- economictimes.indiatimes.com
No comments:
Post a Comment