MyValueResearch

Palm oil

Palm oil is a form of an edible oil, which is relatively high in saturated fats and is obtained from the fruit of the oil palm tree. It is the second-most widely produced edible oil after soybean oil. Almost 90% world production of the palm oil is used as edible oil and 10% of production accounts for industrial uses. This oil has a unique feature of remaining stable in a good range of temperature.

There are several derivatives of palm oil viz., Crude Palmoil, Crude Palmolein, RBD (Refined Bleached Deoderised) Palmoil, RBD Palmolien and Palm Kernel Oil.
Moreover crude palm oil is also used in the manufacturing of soaps, ointments, cosmetics, detergents, lubricants, and feedstock for biodiesel. It is diverted for producing bio-diesel because it’s easily available and cheap.
Now a days, demand of palm oil is increasing due to higher prices of other edible oils such as soyabean, sunflower and mustard oil etc. It is evident from the market data that whenever the prices of other edible oils increase then the demand of palm oil also increases because consumers shift from other costlier oils to cheap palm oil. The price of palm oil is less as compared to other edible oils.

Market Influencing Factors

· World demand and supply fluctuations of the competitive edible oils
· Domestic demand and supply fluctuations of other oils and oilseeds
· Seasonal cycles, as April to December is the peak production period in Indonesia.
· Import policies of the importing nations

Major Consuming Countries: China, India, European, Indonesia and Malaysia

Major Producing Countries: Indonesia, Malaysia, and Thailand
Indian Scenario:

India holds a very small share of palm oil production in the world figures. It hardly contributes to the world production and is not able to satisfy its domestic consumption demand. It produces a mere 70000 tonnes of palm oil annually i.e. just 0.2% share in the total world’s production. The state having the maximum production of palm oil in India is Kerala as it produces 20000 tonnes per year. India is basically a net importer of the palm oil.

Global Scenario:

The World produces about 40 million tonnes of palm oil per annum. Out of which more than 85% is produced by Malaysia and Indonesia combined. Malaysia is the largest producer of palm oil in the world and Indonesia is the closest competitor to the leader country in this production context.
Crude palm oil markets in India are

· Kandla (Gujarat)
· Mumbai (Maharashtra)
· Kakinada (Andhra Pradesh)
· Chennai (Tamil Nadu)

The major crude palm oil markets in the world are Bursa Malaysian Derivatives (BMD) – largest futures market for crude palm oil Indonesia