Indonesia palm oil exports to India seen at record high

Bloomberg

Palm oil exports from Indonesia to India, the world’s biggest buyer, will probably climb to the highest ever this year as strong demand counters higher import duties.
Shipments of palm and kernel oils to India climbed 32 percent to record 7.6 million metric tons in 2017 from a year earlier, according to the Indonesian Palm Oil Association. Exports are likely to advance further this year to keep pace with the South Asian country’s population and economic growth, the association’s secretary general Togar Sitanggang said.
India, which relies on imports to meet about 70 percent of its total vegetable oil requirements, doubled the levy on crude palm oil to 30 percent in November and increased the duty on refined palm oil to 40 percent from 25 percent. The move, coupled with high inventories in top producers Indonesia and Malaysia, resulted in palm oil prices dropping 19 percent in 2017.
“India’s import duty hike will likely be temporary,” Sitanggang said. “Now they feel they need to protect” their farmers and local output from imports. That stand may change and the duty may be cut again to meet the country’s edible oil demand, he said.
India may also consider a request from Indonesia’s President Joko Widodo to reduce the levy, said Derom Bangun, chairman of the Indonesian Palm Oil Board.