Edible oil import prices slip on Thai controls

The import prices of crude palm oil in Indonesia and Malaysia declined on Tuesday on the back of depreciating currencies in the two countries following Thailand's curbs on global investors.

Fearing that the Thai controls may spark off stringent measures in their countries, the prices of crude palm oil declined by $5 across all sectors.

The FOB prices in Indonesia and the CIF prices at Mumbai port are being quoted at $525 ($530 at the close of the previous day) a tonne and $565 ($570 previously) a tonne, respectively.

The prices of CIF soybean oil have also witnessed a decline of $10 to $700 a tonne, while those of RBD palmolein have slumped by $5 to $590 a tonne in Mumbai.

"This may result in higher exports at lower prices. But the prices in the domestic market may also decline simultaneously due to its dependence on imports," said B V Mehta, executive director of The Solvent Exporters' Association of India.

India imports about 2.5 million tonne of crude palm oil from Indonesia out of the total consumption of 3 million tonne.

Similarly, soybean oil imports constitute about 1.7 million tonne with a substantial quantity imported from Indonesia and Malaysia.

The government of Thailand has taken stern action on foreign investments in order to cool down its appreciating currency, baht.

Baht had touched a historical high with an yearly gain of 16 per cent against the dollar. But the government's measures softened the currency by 1.1 per cent, with the baht settling at 35.93 against the dollar in Bangkok.

The currencies of Indonesia and Malaysia are ruling at 9.173 and 3.585 against the dollar with a loss of 0.9 per cent and 0.8 per cent respectively.

"The market is speculating and the central bank may make a similar move to what happened in Thailand,'' said Rafael Algarra, senior vice-president with Security Bank Corp in Manila.

"This encouraged people to sell the peso,'' which may trade between 49.40 and 49.80 this week, Bloomberg said quoting Central Bank Governor Amando Tetangco.

Central banks in Malaysia, the Philippines and Indonesia clarified on Tuesday that they would not follow Thailand in implementing capital restrictions to control their currencies.