LatAm’s palm oil a blow to Malaysia, Indonesia: Some nations not concerned over sustainable crude palm oil

There are countries that are not at all concerned with RSPO certification or Malaysia’s MSPO. At a recent The Palm Podcast hosted by the RSPO Secretariat titled “HCV Talk: Can Palm Oil & Biodiversity Conservation Coexist?” by Ruth Silva, Director of Assurance at the High Conservation Value (HCV) Network, regrets were expressed.

Ruth shared insights into ongoing conservation efforts and how the palm oil industry can contribute to biodiversity protection while meeting global demand sustainably.

But this is being undermined by some countries.

India is one of the palm oil importing countries that does not give any consideration to sustainable certification that is a requirement in the import markets of western countries.

Latin American producers offering the palm oil at significantly reduced rates have won the purchasing decisions Indian importers who have snapped up palm oil from Colombia and Guatemala, said Aashish Acharya, vice president at Patanjali Foods Ltd, a leading importer of edible oils.

Typically, the global palm oil supplies are dominated by Indonesia and Malaysia, who counted India as one of their largest customers with an import quantity of up to 9 million tons in the financial year 2023/24.

Conversely, Colombia and Guatemala, ranked fourth and sixth in global palm oil production, export largely to North America and Europe.

Colombian and Guatemalan cargoes were offered at steep discounts on a free-on-board (FOB) basis to ensure their landed cost at Indian ports remained lower than supplies from Malaysia and Indonesia.

The increase in Colombian and Guatemalan production winning over new  trading partners can affect Malaysian palm oil futures.

According to Sandeep Bajoria, Chief Executive of Sunvin Group, a Mumbai-based brokerage, despite the shipping duration from South America being approximately 45 days, the lucrative discounts compensated for the time involved.

The landing cost of South American palm oil at Indian ports was more than $10 per ton below the costs of supplies from Indonesia and Malaysia.

The rate offered for crude palm oil, inclusive of cost, insurance, and freight, is about $1,165 per ton for October delivery.

Known to export half of its 5 million tons of palm oil, Latin America sees India’s new purchasing trend as a door opener to diversify their supply chains. This notion is shared by

According to Acharya, the rising demand for palm oil will retain its momentum in the ensuing months due to the festival season in India. This annual event beginning in September catalyses a surge in demand for edible oils to make traditional sweets and fried foods.

The landed cost of South American palm oil at Indian ports was more than $10 per ton lower than supplies from Indonesia and Malaysia, another Mumbai-based dealer said.

Crude palm oil (CPO) is currently being offered at about $1,165 a ton, including cost, insurance and freight (CIF), in India for October delivery.

Freight to ship palm oil from the Americas is about $90 per ton, compared with $45 from Southeast Asia, said Sandeep Bajoria.

Vessels will be loaded at South American ports in September to arrive at India’s Kandla port in October, said a New Delhi-based dealer.

Latin America exports half of its 5 million tons of palm oil, and India’s first purchases from the region could open the door to more supplies, said Aashish Acharya.

Ecosystems—including forests, wetlands, and biodiversity hotspots—are often portrayed as being in crisis in anti-palm oil campaigns, fuelling calls for boycotts as a way to protect them.

Palm oil cultivation and broader conservation efforts can truly coexist in a way that supports sustainable development if all importing countries care enough to import only sustainable palm oil.

In future, Malaysia will also face price pressure from more palm oil exporters from some equatorial Africa countries.

Tags: Crude palm oil, Production, India, Malaysia, palm oil, Latin America, Guatemala, demand, Colombia, export, Indonesia