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An announcement to stop palm oil exports from Indonesia led to a rise in prices of all types of edible oils. The prices of edible palm and soybean oil have been revised following the news of removal of crude palm oil from the export ban list in two days. However, fears of a prolonged Chinese lockdown have also affected the market.
Indonesian President Mr. Joko Widodo announced a ban on palm oil exports last Friday (April 22, 2022) to keep his country's market tolerable, effective April 28. Following the announcement, soybean prices rose to USD 1,835 a tonne in the Chicago Board of Trade (CBOT). Earlier, after the Russia-Ukraine war, the price rose continuously and on March 11, the price rose to a maximum of USD 1,812.
On Monday (April 18, 2022), the opening day of the market, the Indonesian Ministry of Agriculture announced that crude palm oil would be dropped from the export ban list. Soybean and palm oil prices were revised after this news. For example, the price of soybean has come down to USD 1,824 per ton after a slight revision in the CBOT. The price has dropped by about USD 11 per ton. On the other hand, the price of crude palm oil fell by about USD 11 per ton to USD 1,435.75. Despite a slight decline, the upward trend in the edible oil market has stopped.
Commodity market analyst Asir Haque said soybean and palm oil prices have been revised for two main reasons. 1. Indonesia has dropped crude palm oil exports in another announcement. 2. Demand in China's lockdown has declined. He added that the prices of all types of products have been revised to reduce the price of fuel oil.
Analysts say Indonesia's decision to suspend refined palm oil exports will not last long. Meanwhile, the price of fresh palm fruit has dropped in Indonesia. The country's daily newspaper, The Jakarta Post, made headlines on April 25, saying the decision to suspend exports would hurt farmers.
About 90% of Bangladesh's palm oil is imported from Indonesia. Basically, the main reason for imports from Indonesia is the relatively low prices compared to Malaysia. Imports from Malaysia are 10 percent. These two countries are also the top exporters of palm oil.
Indonesia will continue to import crude palm oil with the announcement of its exports. Bangladeshi importers import palm oil in refined and unrefined form. Once it was mostly imported in unrefined form but now it is less. However, the import of crude palm oil will increase as there is a refinery.
|Source:Online/SZK
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