International palm oil prices are expected to rise by at least 10 per cent due to soya production in Argentina being affected by floods there, CEO of Malaysian Palm Oil Council (MPOC) Yusof Basiron said today.
India imported nearly 4 million tonnes of palm oil last year and may import more this year due to increase in domestic consumption, he said here.
"I see price of palm oil increase simply because soya production is being affected by the flood in Argentina. So this will force soya price to go up and simultaneously force the palm oil price to go up. Commodity experts expect soya production to go down by at least 10 per cent," Basiron said.
"The price (of Soya) would eventually reflect the demand-production gap. The current price of palm oil is about USD 650. I think we could see the price in the next six months to reach slightly over USD 700," Basiron told reporters.
He further said El Nino would also impact the production of palm oil by about 10-17 per cent this year.
He, however, ruled out its impact on the oil prices.
According to Basiron, palm oil is one of the top agriculture commodities in Malaysia with production of about 20 million tonnes last year.
"India is our number one importer by volume. Over 3.9 million tonnes of palm oil was imported by India last year.
"Because India is not producing enough of it, there is gap in demand and supply. This will mean that India needs to import more. It means India can import from the countries having excess production of vegetable oil. Malaysia is a net exporter of oil," he said.
Meanwhile, the MPOC hosted the 'Malaysia-India Palm Oil Seminar 2016' in the city today. The event is themed on 'Bridging the supply-demand gap for India through Malaysian Palm Oil'.
The event enabled palm oil players from within and outside India to identify avenues of collaboration with their counterparts from Malaysia and around the world, a statement said.
The seminar offered a platform to discuss challenges and opportunities that lie before the sector and initiate efforts to benefit the trade, it said.
