POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: Price Direction:
India Palm Oil Import 2021 Outlook after CPO Import Duty
By: Mr. Nirav Desai

Mr. Nirav Desai heads of below three companies,
  1. GGN Research: Market intelligence & consultancy company on Argo commodities with oil & oilseeds being its forte.
  2. GGN International: An Intermediary for crude edible oils like Palm, Soy, Sun & Rapeseed oils.
  3. Nikhil commodity: TCM of NCDEX/MCX-Indian commodity exchanges.
  4. This creates a unique combination and understanding of the commodities market and all its major aspect of RESEARCH, PHYSICAL & FUTURES.

    With 15 years of experience in these sectors, he is an expert in conducting market studies and other fundamental.

He is widely known for being:

- A Regular speaker on CNBC awaaz, Zee Business and UTV Bloomberg for his views on commodities and especially on Oilseeds and Pulses.

- An Experts on India Agro Futures, he is on the product committee and Advisory Board of commodity Exchange (NCDEX & MCX)
- A Regular speaker in National & International conferences and forums. He has submitted several research papers like:
  • The cost of production of Agricultural Commodities to an Indian farmer
  • Reasons behind India becoming the biggest Palm Oil importer in the world.
  • Out of Home consumption of edible oil in India.
  • Projection on Indian edible oil scenario in 2015.
- Member of the Crop Estimate of COOIT and is also, on the Executive Committee of SEA.

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India is a key importer of edible oils, it includes around 2/3 imports of palm oil (CPO). So, it is important to know the trend and the factors that affect CPO imports. Like recently Indian Govt. change the duty structure, where duty advantage of CPO over soy oil reduced to 2.75% from 8.25%, but still it is cheaper oil compared to other edible oils. Now, the question is: At what extent CPO would take the import share of its rival soy oil. Also, at what extent domestic edible oils production would provide relief from heavy import burden.

In this presentation, we will analyze and compare the current edible oils requirement and prospects of imports in the near term.


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Questions & Answers (7) :
VS LEE
3 months ago
Hi Mr. Desai, If I remembered correctly (correct me if I am wrong), there are some oil palm plantation in India started years ago. What is oil palm contribution in India's oil output? Thank you.
Nirav desai:
Yes, Oil Palm plantations have started in India. Domestic output of Palm oil is 2.50 Lac MT which is around 3.5% of India’s Oil output.
3 months ago
MOHD RAFIZAN BIN SAMIAN
3 months ago
Is there any active lobbyist group in India against palm oil like in EU? If there is, how significant are their voice to the palm oil import in India?
Nirav desai:
No, there is no active lobbyist group in India against palm oil. There is a large dependency on palm oil to satisfy Indian food and other demand.
3 months ago
Anthony Yap
3 months ago
Sri Lanka on Monday (5/4/2021) banned imports of palm oil and new palm plantations, and told producers to uproot existing plantations in a phased manner, in a surprise move that baffled the edible oil industry. Will India affected by the new ruling by Sri Lanka government? If Yes; please elaborate further, thanks.
Nirav desai:
No, India is not affected by the move of Sri Lanka.
3 months ago
George Teh
3 months ago
Historical data clearly indicates that India is not self-sufficient in edible oil. You alluded to weather challenges and agricultural land supply constraints, suggesting that this trend is set to persist; and price-sensitive middle-class consumers, suggesting that Indian consumers are unfairly compelled to shoulder the adverse consequences. Against this backdrop, what justification does GOI have on imposing and tinkering with import duties and cess on edible oil in general and palm oil in particular? I heard an argument that GOI directs the duties/cess to build irrigation infrastructure, but the historical trend fails to substantiate this argument so I suspect this is bureaucratic smoke-screen. Can you provide insight into GOI duties/cess policy? Is it not time to push GOI to be more innovative in policy-making and be more considerate of burdens forced on consumers?
Nirav desai:
Hi George, Govt. imposed Import duty to safeguard the domestic oilseed processors. It is not just duty but prices of edible oils are rising internationally due to world’s lower production of oilseeds. The retail prices of edible oils have increased by 25% to 70% in the past one year. Govt. is now worried about the continuously hike in edible oil prices. Yesterday, food ministry sent a proposal to review cooking oil prices and a meeting may be called soon. The new duty structure impose to raise specific fund for the Agriculture Infrastructure and Development, in the contrary it reduces the import bill of the Government. I believe this is a step towards their mission of India to become self-sufficient in edible oils, which help to reduce import burdens. As of now, it is difficult say that how much affect or deviate from this agenda due to system glitch and bureaucracy.
3 months ago
Nirav desai
3 months ago
Hi Fency, Due to high price of edible oils, the demand of India will be remain on hand-to-mouth for a time been until the price of edible get eased. If, we assume the rapid pace of vaccination continues & successfully done in 2021, then palm oil imports may further increased due to its competitive price. It is difficult to regain the import share of refined palm oil as Govt. put RBD into restricted category. Also, CPO & RBD import duty gap is now widened by 19.25%.
FENCY
3 months ago
Dear Mr Nirav Desai Please indicate if there shall be any extempore for Palm Oil to be imported more by India, assuming covid-vaccination shall be successful in 2021, and food demand is increasing along with population growth, thus Refined Palm Oil can regain its share
Nirav desai:
Hi Fency, Due to high price of edible oils, the demand of India will be remain on hand-to-mouth for a time been until the price of edible get eased. If, we assume the rapid pace of vaccination continues & successfully done in 2021, then palm oil imports may further increased due to its competitive price. It is difficult to regain the import share of refined palm oil as Govt. put RBD into restricted category. Also, CPO & RBD import duty gap is now widened by 19.25%.
3 months ago
HCLeow
3 months ago
Dear Sir, How is the recovery of the HoReCa sector in India vs pre-COVID level? Are you seeing any slowdown of household demand for vegoil after such a strong surge of vegoil price? As domestic oilseeds production is expected to be better this year, is there any risk for Indian government to increase the import duty on palm oil or softoil to protect domestic oil? Thank you.
Nirav desai:
Hi HCLeow, HoReCa sector is slowly recovering. With the resurgence of second COVID wave, it seems that it will take 5-6 months more to reach at the pre COVID levels. India comprises of a very large volume of middle class price sensitive families. Strong surge of Veg oil prices will definitely result in demand rationing in household sector. There is a very large dependency on edible oil imports. As we can see edible oil prices are trading at all time high and Govt is also worried for the rising prices. So we don’t think that here any risk that Indian government will increase the import duty on palm oil or soft oil and further escalate the fire in edible oil prices.
3 months ago
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