BLOG
Indonesia bans palm oil export
Buzzing:
Indonesia, which is the world's largest producer of palm oil and meets nearly 45% of the total palm oil supplied into India annually, has decided to ban exports from April 28 till further notice.
Context:
Edible oil prices in India are already up by 50% in the last one year due to global commodity inflation and Russia – Ukraine crisis. Indonesia produces nearly half of the world’s supply of palm oil, which is used in processed foods, soaps, cosmetics & edible oils. The country exports nearly one-third of its palm oil production. The sharp increase in edible oil demand is also due to its diversion towards bio-diesel in Indonesia propelled by higher crude oil prices.
Our perspective:
India imports around 13-13.5 million tonnes (MT) of edible oils every year, of which around 8-8.5 MT (around 63%) is palm oil. We believe restricting the palm oil supplies would result in a spike in edible oil prices in India, which are already up by ~50% in the last one year. We believe palm oil prices could move up by 10-15% due to this ban. The prices of other edible oils like soyabean are also likely to go up in the near term. This would be negative for edible oil, soaps and cosmetics manufacturers. Largest impacted companies - HUL, Marico, Zydus Wellness, Godrej consumer, Jyothy Labs
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.