20/08/2008 (The Hindu), New Delhi - Falling global palm oil prices is a welcome news for consumers but not for importers who are now seeking a re-adjustment in their overseas contract to ward off losses, Solvent Extractors Association said on Tuesday.

"The landed price of crude palm oil has fallen by 26 per cent to 890 dollar per tonne in merely a month taking most refiners by unawares and they are renegotiating the contracts to ward off loss," SEA's Executive Director B V Mehta told PTI.

A steep fall in prices has created a serious problem to importers in India, China and Bangladesh, he said.

Prices of palm oil, which is used in soaps, margarine and biodiesel have declined by 20 per cent this year and have nearly halved from their peaks in March on reports of high stocks, slump in crude prices and payment defaults by Indian and Chinese buyers.

Mehta said, "Importers who had entered into the contract when prices were high would be affected the most as they get the delivery at agreed rates," he said. Now they are seeking some re-adjustment in shipment period or defer delivery for some time, they added.

India imports 5-6 million tonnes of vegetable oils in the form of palm oil from Malaysia and Indonesia and soy oil from Brazil and Argentina.