Asian Palm Oil Alliance Chaired A Meeting To Ensure Stable Export Policy From Producers

COMMODITIES(B-Trams):After changes last year caused volatility in the trading of the tropical oil, the head of the Asian Palm Oil Alliance (APOP), a body of buyers of palm oil, stated that producers should ensure they have stable export policies.

Atul Chaturvedi, the chairman of the APOP, stated on Monday at the annual meeting of member countries in Kuala Lumpur that the alliance wants to add more buyers. The current members of the APOP include India, Pakistan, Bangladesh, Nepal, and Sri Lanka.

According to Chaturvedi, although countries that import palm oil have constructed refineries to process crude palm oil, producers are imposing higher export duties on crude palm oil than on refined palm oil and making the purchase of refined palm oil cheaper than the purchase of crude palm oil.

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The increased tax on crude palm oil is preventing refineries in importing nations from operating. He stated, “Producers must consider this duty structure, which is hurting buyers.”

Dorab Mistry, director of the Indian company Godrej International that makes consumer goods, told the group that Indonesia and Malaysia need to realize that Asian countries are their most dependable buyers and that they buy without causing problems for the industry.

According to Mistry, palm oil may rise to between 4,418 and 4,459 ringgit. A sudden change in export policies, like Indonesia’s ban on exports last year Read More….

This not only disrupts supply chains in importing nations but also hurts producers. When making sudden changes, producers should think about buyers, he said.

Last year, Indonesia, the largest palm oil exporter in the world, surprised buyers by banning palm oil exports. This forced buyers to look for alternatives like soyoil and sunoil and secure supplies from Malaysia, a rival, at a record-high price.

Also Read :Market Traders Must Be Prepared To Capitalise On Price Volatility ; Bursa Malaysia Chairman Tan Sri Abdul Wahid

According to Ajay Jhunjhunwala, president of the Solvent Extractors’ Association of India, major producers also tend to respond more to the needs of European buyers than Asian ones.

“Less than 9% of all palm oil imports come from the European Union. “Producers try to comply with EU demands and ignore Asian buyers, but Asian buyers account for around 40%,” he stated.

A deforestation law was enacted in December by the EU, requiring businesses to produce a due diligence statement and provide “verifiable” evidence that commodities like oil palm were not grown on deforested land after 2020 or face significant fines.