18/05/2011 (Myanmar Times) - Newly introduced measures to bring palm oil prices down appear to be failing, with palm oil traders at the Bayintnaung Wholesale Commodity Exchange Centre in Yangon reporting stock shortages and rising prices last week.

“Supplies of palm oil to the local market have been delayed and demand remains strong,” said one cooking oil trader, who is also an official with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).

Palm oil was selling for about K3010 a viss (1 viss is 1.6 kilograms or 3.6 pounds) in wholesale markets on May 9, or about K3300 retail, both up about 20 percent on the previous week. On May 5, palm oil wholesaled for about K2600 a viss and retailed for about K3000.

After the price jumped, the Myanmar Edible Oil Dealers Association held a meeting to discuss ways of quickly importing oil and bringing prices back down.

On April 9, the newly installed Minister for Commerce, former UMFCCI chairman U Win Myint, said the government would allow companies to apply for licences to import palm, which had previously been limited to a handful of influential companies. Since then, more than 100 companies have applied for licences, including 10 unnamed “big” companies, according to the May 6 issue of the ministry’s Business Today journal.

The journal reported that those 10 firms had been given priority because they have the required foreign capital, infrastructure and foreign links to quickly import oil. However, Business Today did not name the companies.

Each company will be allowed to import up to 3000 tonnes of palm oil a month, 60pc of which must be distributed to the 3300 oil dealers in Yangon that are supervised by the Commodity Price Supervision Committee, it said. The remaining 40pc can be sold freely, the report added.

U Khin San, a palm oil trader at the Bayintnaung warehouse compound, said that when sufficient supply was made available the price would drop to K2300 a viss wholesale.

“We also plan to try and import oil ourselves. If there are more players in the market, the price will be more stable and less easily manipulated,” he said.

Ayeyarwady groundnut oil retailer U Khin Soe estimated that about 70pc of edible oil consumed by the market is palm oil, 25pc is mixed groundnut or sesame/palm oil and 5pc is pure groundnut or sesame oil.