We are surprised by this news as there had been no hints of such a move by the Indian government. This decision will take away the 20% pricing advantage that CPO has had over soya oil in the price-conscious Indian edible oil market since Nov 08.
The higher import duty on soya oil over the past few months helped palm oil gain market share in the Indian edible oil market. By removing the duty, India is restoring to normal levels soya oil’s price premium over palm oil. This move could erode palm oil’s share of India’s edible oil imports, which stood at 86% in Nov 08-Jan 09. This is negative for CPO price. On a more positive note, the Indian government’s efforts to keep edible oil import duties low will enable imported edible oils to stay competitive and help to boost or sustain India’s demand for edible oils despite the global economic downturn. It could also reduce future plantings of oilseeds in India due to the lower domestic selling prices.
No comments:
Post a Comment