Palm oil import default unlikely despite price fall

MUMBAI: The sharp fall in international prices of palm oil, one of India’s biggest imports after crude oil and gold, triggered fears that Indian importers would default on their purchase commitments, like they did in the past, but a leading industry authority said this is unlikely.

The price of crude palm oil (CPO), the largest imported vegetable oil, has fallen by around $100-120 a tonne over the past two months. During this period, crude palm oil, which is traded on Malaysian multi-asset class bourse Bursa Malaysia, hit a five-and-a-halfyear low of 1,914 ringgit.

Though prices have recovered from the low to around 2,153 ringgit on Thursday, concerns over further imports in the pipeline from Malaysia and Indonesia spooked a few market stakeholders who fear the likelihood of huge import defaults, similar to what happened in 2008-09.

But this has been discounted by Dorab Mistry, director of Godrej International, and a globally respected authority on the subject of vegetable oil. “The fall of $100-120 is not a problem for big, well-financed Indian importers,” Mistry said.