Palm oil continued in a downward direction with its prices dropping to a near 13-month low as leading producers, Malaysia and Indonesia struggled with rising production amidst low export demand. On Bursa Malaysia Derivative Exchange, crude palm oil for delivery in October ruled at 3,646 Malaysian ringgit (MYR) a tonne ($818.68), the lowest since June 28, 2021.
With prices dropping sharply in the last few sessions, traders and industry experts see further pressure on palm oil. The decline in edible oil prices has led to the domestic refining industry, particularly the Soyabean Processors Association of India (SOPA) and Solvent Extractors Association of India (SEA), urging the center to hike or restore import duty on edible oils.
The SOPA Chairman said Finance Minister Nirmala Sitharaman should consider a duty hike as soybean and groundnut will be due for harvest in September and oilseeds prices may fall at the current rate of zero duty. “It will affect farmers and result in a setback to domestic oilseed production,” he said.
SEA President Atul Chaturvedi told his members that the association has sought action against those who fail to utilise licences given under Tariff Rate Quota (TRQ) to import soybean and sunflower oils at zero duty. The Centre had allowed zero-duty imports of these soft oils as a measure to control surging inflation and lower edible oil prices. Under TRQ, 2 mt each of these oils can be imported during July-June 2022-23 and July-June 2023-24.