CPO prices eased on profit booking by traders. Prices were also influenced by a fall in spot market demand. Speculators offloaded positions in tandem with weakening trend in other Edible Oils. Prices declined on concerns that exports from Malaysia may decrease this month as China is buying less after tightening quality regulations on imports.
The benchmark price of Crude Palm Oil was raised today by India. This move was done as part of efforts to curb overseas purchases and protect domestic Oilseed farmers. The government last week decided to impose a tax in order to prevent a flood of cheap Palm Oil imports from Malaysia and Indonesia, which were previously tax-free.
India's imports of Palm Oil have surged in the past few months after Indonesia and Malaysia cut exports taxes to reduce their large stocks. Global Edible Oil importers are likely to increase purchases of low priced Palm Oil in coming months, turning away from Soy Oil. Palm Oil is much cheaper than domestic branded vegetable oils and production is low because local mills lack the sophistication and infrastructure to boost output.