Indonesia may ship more CPO to India

(KPBPTPN) : Indonesia, the world’s second-biggest exporter of crude palm oil (CPO), may this year ship 11 per cent more of the edible oil to India, whose oilseed production is expected to lag last year’s levels after a delayed start to the rainy season. Indonesia may ship as much as 2 million tonnes of CPO to India this year, compared with 1.8 million tonnes in 2004, Derom Bangun, chairman of the Indonesian Palm Oil ProducersAssociation, said here today.
`We are expecting that exports to India this year will be about two million tonnes as compared to 1.8 million tonnes last year,` Mr Derom Bangun, chairman of Indonesian Palm Oil Producers Association, said on the sidelines of the India- Indonesia Joint B usiness Council meeting here on Monday.
Mr Bangun, who is also chairman of the India Committee of the Indonesia Chamber of Commerce, said that they expect India's domestic palm oil production to be down this year on account of weather-related problems.
Production in Indonesia, on the other hand, is likely to rise over 11 per cent this year to 13.6 million tonnes as against 12.2 million tonnes, he said, adding this is largely due to increased area of production and better productivity.
India is the world's third largest vegetable oil importer and also the fourth biggest consumer of palm oil, which constitute about 80 per cent of the country's edible oil imports. Local oilseed production is likely to be affected this year due to delayed monsoon season in Madhya Pradesh and floods in Maharashtra, the two prominent soyabean growing States.
The country imports nearly 80 per cent of its palm oil from Malaysia and the rest from Indonesia. Imports from Indonesia are also expected to rise after Malaysia recently removed its currency ringgit's peg to the US dollar, making its palm oil more expen sive in dollar terms compared to the Indonesian exports.
An increase in imports of CPO by India, the world’s fourth-biggest user of the commodity, may mean higher prices in countries such as Malaysia and Indonesia.

Source : Bloomberg, http://www.thehindubusinessline.com