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Significant reduction in export tax by Malaysia on CPO is likely to increase demand for CPO from major palm oil consuming countries like India, China, USA and others.

29 Dec 2012

NEW DELHI (Commodity Online): India Crude Palm Oil (CPO) futures have marginally gained on slight rise in the domestic and international demand. Concerns over palm oil supply disruptions as a result of heavy rains at major palm oil producing regions in Malaysia caused the upward movement in prices in international markets.

Significant reduction in export tax by Malaysia on CPO is likely to increase demand for CPO from major palm oil consuming countries like India, China, USA and others.

CPO exports from Malaysia rose slightly last week as a result of increased demand from India and USA.

Malaysian palm oil futures rose two month high on Friday. On the other hand, for the week, palm oil prices climbed 3.6 percent, extending last week's gain that came after four straight weekly losses- reports Reuters.

Imposition of lower export duty on CPO by Malaysian government may indirectly effect the Indian edible oil industry.

Dorab Mistry, a leading palm oil expert and the director of Godrej International has already called for a 10 percent customs duty on India's crude palm oil imports to protect the farmers in India. Palm oil covers around 80 percent of India's edible oil needs.

CPO futures on India's Multi Commodity Exchange (MCX) were slightly up by 1.05 percent for January contract at Rs. 441.40 per 10 kg as of 12.12 IST on Saturday.

The CPO trend on MCX looks positive, however traders should wait for the clarity – say commodity analysts.

At present the global palm oil production is around 45 mn tons and expected to rise by 25 percent within years.


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