Palm oil prices continue to surge on robust demand
20.02.2023 (CNBC TV18) - Malaysian palm oil prices have continued to surge and were trading at six-week highs. The prices increased because rival edible oil prices were rising, so proxy inflation was coming into the prices and because weak Malaysian ringgit was making the product expensive.
The other major producer Indonesia is seeing taxes and the Indonesian government, yet again, is trying to curb too many exports. There are higher taxes, especially within the February 18 to February 28 period, which will see less exports and high taxes within Indonesia.
The markets are also looking at higher consumption within the country. So, in 2018, Indonesia was consuming 13 million tonne, which now has turned up to 21 million tonne. A lot of bio-fuel mandate has also kept the palm oil prices on the higher side.
Also, with Ramadan, the international markets are buying a lot of edible oil.
India also has imported record palm oil in the months between October and December. For January, there has been a 20 percent decline.
The markets believe that as the demand, ahead of the summer season and because of festivals goes higher, it is seeing edible oil as a sector seeing strong prices.