Know Crude Palm Oil
Palm oil is a form of edible vegetable oil obtained from the fruit of the oil palm tree. It is the second-most widely produced edible oil, after soybean oil. However, it may have now surpassed soybean oil as the most widely produced vegetable oil in the world.
The palm fruit is the source of both palm oil (extracted from palm fruit) and palm kernel oil (extracted from the fruit seeds).
Palm oil is one of the few vegetable oils relatively high in saturated fats (such as coconut oil) and thus semi-solid at room temperature.
There are several commercial variants of palm oil available viz., Crude Palmoil, Crude Palmolein, RBD (Refined Bleached Deoderised) Palmoil, RBD Palmolien and Palm Kernel Oil. Crude Palmoil when subjected to refining results in the other factions.
Palmoil with an annual production of 25-27 million tons is second most produced oil in the world.
Malaysia (13 million tons) and Indonesia (10 million tons) are the major producers and together account for 85% of production.
Around 80% (21-23 million tons) of global production is exported. Malaysia and Indonesia with 12-12.5 and 6-7 million tons respectively are major exporters. India, China and EU are the major importers.
Price competitiveness has been reason for increased consumption of this oil.
Bursa Malaysian Derivatives (BMD) is the largest futures market for crude palmoil. Malaysian & Indonesian FOB prices set the mood in the physical market.
India imports roughly 2.5-3.5 million tons of palmoil and its variants a year. The domestic production is very meager at 0.5 lakh tons.
India imposes 65% duty on crude oil and 75% (imposed in 2003-04 Union Budget) on RBD Palmoil. The import ratio is highly dependent on the duty imposed.
In addition to the customs duty, Government of India also imposes tariff value, on which the customs duty is calculated irrespective of the actual price at which the oil is imported.
