CRUDE PALM OIL

Palm oil, derived from the fresh fruit bunches (FFB) of oil palm trees grown in plantations, comes in various commercial variants including Crude Palm Oil, Crude Palm Olein, RBD (Refined Bleached Deodorized) Palm Oil, RBD Palm Olein, and Palm Kernel Oil. The refining process transforms Crude Palm Oil into these different fractions.

Global Scenario:
Palm oil holds the position of the second most produced oil globally, with an annual production ranging from 25 to 27 million tons. Malaysia and Indonesia are the primary producers, contributing 85% of the total production, with Malaysia producing around 13 million tons and Indonesia around 10 million tons. Approximately 80% (21 to 23 million tons) of the global production is exported, with Malaysia and Indonesia being the major exporters, shipping out 12 to 12.5 million tons and 6 to 7 million tons respectively. Major importers include India, China, and the EU, driven by the price competitiveness of palm oil.

Major World Palm Oil Markets:
Bursa Malaysian Derivatives (BMD) stands as the largest futures market for crude palm oil, and the Malaysian and Indonesian Free on Board (FOB) prices heavily influence the physical market.

Indian Scenario:
India imports roughly 2.5 to 3.5 million tons of palm oil and its derivatives annually, with negligible domestic production at only 0.5 lakh tons. The import ratio is significantly influenced by the duty structure, with a 65% duty imposed on crude oil and a 75% duty (set in the 2003-04 Union Budget) on RBD Palm Oil. Additionally, the Government of India imposes a tariff value to calculate customs duty, regardless of the actual import price.

In 2002-03, India imported 21.5 lakh tons of crude palm oil and 3.15 lakh tons of RBD Palm Oil. However, from November 2003 to July 2004, India imported 13.7 lakh tons of crude palm oil and 4.8 lakh tons of RBD Palm Oil. Major entry points for palm oil into India include Kandla, Mumbai, and Kakinada, serving as significant trading hubs as well.

INDIA IN WORLD PALMOIL INDUSTRY