- Last week, Bloomberg quoted Dorab Mistry as saying that the oilseed industry in India is expecting the new Indian Government led by Narendra Modi to increase import duties on vegetable oils.

- Industry players would like Modi to raise the import tax on crude palm oil to 5% and refined palm oil to 20%. Currently, the import duties are 10% on refined palm oil and 2.5% on crude palm oil.

- Palm oil refiners in India have been operating at low utilisation rates as buyers prefer to import refined palm oil from Malaysia and Indonesia.

- This development came as Jakarta Post reported that Indonesia’s Industry Ministry is finishing its assessment of the country’s export tax structure.

- A government official said that the ministry will see how the export tax structure and incentives can be directed to encourage production of downstream products further.

- The ministry also examined the need to maintain export tax for some downstream products such as biodiesel.

- The Industry Minister’s proposal will be discussed by other ministries and has to be approved by the Finance Ministry.

- Meanwhile, Oil World expects Malaysia’s palm oil exports to be low this year because of weak production resulting from the dry weather and shortage of labour.

- Oil World forecasts oil yield in Malaysia to decline to 4.26 tonnes/ha in 2014F, which is the lowest in four years.

- Apart from the weather, the slide in oil yield was also attributed to a growing proportion of ageing oil palm trees in the country.

- The USDA (US Department of Agriculture) reported that soybean plantings in the country were 59% completed as at 25 May, above the five-year average of 56%.

- Corn plantings were 88% completed as at 25 May, way ahead of the 73% completion achieved in the previous week and in line with the five-year average.

Source: AmeSecurities