Palm oil is obtained from fresh fruit bunches (FFB) of
oil palm cultivated in plantations. There are several commercial variants
of palm oil available viz., Crude Palmoil, Crude Palmolein, RBD (Refined
Bleached Deoderised) Palmoil, RBD Palmolien and Palm Kernel Oil. Crude
Palmoil when subjected to refining results in the other factions.
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Global Scenario
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- Palmoil with an
annual production of 25-27 million tons is second most produced oil in
the world.
- Malaysia (13 million
tons) and Indonesia (10 million tons) are the major producers. They
together account for 85% of production.
- Around 80% (21-23
million tons) of global production is exported. Malaysia and Indonesia
with 12-12.5 and 6-7 million tons respectively are major
exporters.
- India, China and EU
are the major importers.
- Price
competitiveness has been reason for increased consumption of this oil.
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Important World Palmoil Markets
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- Bursa Malaysian
Derivatives (BMD) is the largest futures market for crude palmoil.
- Malaysian &
Indonesian FOB prices set the mood in the physical market.
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Indian Scenario
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- India imports
roughly 2.5-3.5 million tons of palmoil and its variants a year. The
domestic production is very meager at 0.5 lakh tons.
- India imposes 65%
duty on crude oil and 75% (imposed in 2003-04 Union Budget) on RBD
Palmoil. The import ratio is highly dependent on the duty
imposed.
- In addition to the
customs duty, Government of India also imposes tariff value, on which
the customs duty is calculated irrespective of the actual price at
which the oil is imported.
- In 2002-03 India
imported 21.5 lakh tons of crude palmoil and 3.15 lakh tons of RBD
Palmoil. However, in 2003-04 till July from November '03 India has imported
13.7 lakh tons of crude palmoil and 4.8 lakh tons of RBD
Palmoil.
- Kandla, Mumbai,
Kakinada are the major ports for palmoil entry to India and the major
trading points too.
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India In World Palmoil Industry
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(Rounded figs.)
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India
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World
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% Share
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(In
million Tons)
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Annual Oil Production
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0.05
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26
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0.2
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Annual Oil Imports
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3
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22
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13.6
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Annual Oil Consumption
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3
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26
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11.5
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Factors influencing Palmoil Prices
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- The supply demand
and price scenario of competitive oils, viz., soyoil.
- The supply-demand
scenario of all oils and oilseeds in the consuming centers, viz.,
Inda, China and EU. This in turn is manifested as imports from these
countries.
- The palmoil
production cycle: April - December is peak production period.
- Import regulations
imposed in the importing countries.
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