MARKET DEVELOPMENT
Crisis looms as world palm oil prices hit new high
Crisis looms as world palm oil prices hit new high
26/5/07 (Business Recorder) KARACHI: A serious edible oil crisis is looming over the country as the world palm oil prices breached 850 dollar on Friday trading, setting a new world's all time high record. Senior trader said that the international palm oil prices registered an upsurge of 13 dollars per ton during an intra-day trade.
However an extra ordinary buying specially from China was witness on concerns over a possible price hike in the edible oil due to US-Iran tension and workers' strike in Nigeria's state oil company.
Demand of palm oil product is gradually increasing to produce edible oil, as well as for bio diesel in the world market in the wake of rising crude oil prices in the international market, he added. He linked edible oil prices with crude oil prices, saying when the crude oil prices will rise, the price of palm oil will also witness an upward trend.
Traders said that RDB palm oil prices in the international market have shot up by $50 per ton during the current month, as a result its prices have touched new peak of $850 per ton as compared to $800 per ton in the last week of April on international font.
They said that supply of palm oil is not increasing in line with the demand, which is the main cause of rising palm oil prices in the in the international market, as Malaysia is facing shortfall in palm products production due to unfavourable climate.
Period from April to June is major season of palm oil production but huge demand and low production has dragged its price to the all time high peak, they added. China has also become a largest buyer of palm oil and it consistently acquires huge quantity of palm oil from world market.
"China has purchased around 0.35 million tons palm oil during May and still it is placing further orders of palm oil products," said Amjad Shiekh Rasheed Chairman Pakistan Venaspati Manufacturers Association.
He said that palm oil prices stood at $600 per ton in January, which have raised by $250per ton during last three months to $850 per ton on Friday on the international front. He said that November to March is the lean period of the palm oil, consequently it's prices are moving upward for last seven to eight months, adding " traders were expecting that prices will decrease after April but due to short supply prices are still on higher side".
With the increase in palm oil prices on the international front, the domestic scenario is also started changing as the edible oil prices of five kg has increased by Rs 33 per kg. "After this upsurge the branded locally manufactured edible oil is being sold at Rs 498 per 5-kg canister, previously sold at Rs 465 last week," a retailer said.
Retail price of one-kg edible oil has reached Rs 97 per kg, compared to Rs 92 per kg, showing a jump of Rs 5 per kg during last two weeks, he informed. He said that local edible oil prices would further soar in next months following the high import prices.
On the contrary, the country's edible oil consumption stands at around 2.7million tons annually. Around 0.8 million tons out of 2.7 million tons is being supplied by some 128 small and big edible oil refineries across the country, while the remaining gap is to be filled through imports mainly from Malaysia and Indonesia.
However an extra ordinary buying specially from China was witness on concerns over a possible price hike in the edible oil due to US-Iran tension and workers' strike in Nigeria's state oil company.
Demand of palm oil product is gradually increasing to produce edible oil, as well as for bio diesel in the world market in the wake of rising crude oil prices in the international market, he added. He linked edible oil prices with crude oil prices, saying when the crude oil prices will rise, the price of palm oil will also witness an upward trend.
Traders said that RDB palm oil prices in the international market have shot up by $50 per ton during the current month, as a result its prices have touched new peak of $850 per ton as compared to $800 per ton in the last week of April on international font.
They said that supply of palm oil is not increasing in line with the demand, which is the main cause of rising palm oil prices in the in the international market, as Malaysia is facing shortfall in palm products production due to unfavourable climate.
Period from April to June is major season of palm oil production but huge demand and low production has dragged its price to the all time high peak, they added. China has also become a largest buyer of palm oil and it consistently acquires huge quantity of palm oil from world market.
"China has purchased around 0.35 million tons palm oil during May and still it is placing further orders of palm oil products," said Amjad Shiekh Rasheed Chairman Pakistan Venaspati Manufacturers Association.
He said that palm oil prices stood at $600 per ton in January, which have raised by $250per ton during last three months to $850 per ton on Friday on the international front. He said that November to March is the lean period of the palm oil, consequently it's prices are moving upward for last seven to eight months, adding " traders were expecting that prices will decrease after April but due to short supply prices are still on higher side".
With the increase in palm oil prices on the international front, the domestic scenario is also started changing as the edible oil prices of five kg has increased by Rs 33 per kg. "After this upsurge the branded locally manufactured edible oil is being sold at Rs 498 per 5-kg canister, previously sold at Rs 465 last week," a retailer said.
Retail price of one-kg edible oil has reached Rs 97 per kg, compared to Rs 92 per kg, showing a jump of Rs 5 per kg during last two weeks, he informed. He said that local edible oil prices would further soar in next months following the high import prices.
On the contrary, the country's edible oil consumption stands at around 2.7million tons annually. Around 0.8 million tons out of 2.7 million tons is being supplied by some 128 small and big edible oil refineries across the country, while the remaining gap is to be filled through imports mainly from Malaysia and Indonesia.