Indian processors cancel palm oil orders due to rising prices

Indian palm oil refiners have cancelled orders for 65,000 tonnes of crude palm oil (CPO) scheduled for delivery from July to September after a sudden jump in Malaysian base prices, Reuters reported, citing trading sources. The cancellations by buyers came after Malaysian palm oil futures rose more than 6%.

The market has been volatile and traders are looking to hedge risks in anticipation of a price correction. Indian buyers increased their CPO purchases a month ago at a price of $1,000 to $1,030 a tonne, including insurance and freight, after a recovery in palm oil production pushed prices to an eight-month low, but palm oil futures rose this week, following gains in soybean oil and crude oil.

The sudden rise in prices prompted Indian mills to cancel contracts at $1,050 to $1,065 per tonne and take a discount, agreeing to a price slightly below the current market rate. The decision was made jointly with sellers, the publication said.

Despite the cancellation, the country’s oil imports are expected to rise in the coming months as depleted stocks are replenished. Palm oil imports into India hit a six-month high in May, and Indian purchases picked up after India halved its import duty on edible oils last month, but the cancellations have disrupted that momentum.

Tags: India, palm oil