By Malvika Gurung
Investing.com -- In a bid to tame soaring multi-year high inflation figures, the Indian government has exempted customs duty on the import of 20 lakh metric tonnes each of crude soybean oil and crude sunflower oil for two years, i.e., FY23 and FY24.
As a result, the Malaysian palm oil futures eased on Wednesday after rallying for three consecutive sessions.
According to a trader based in Kuala Lumpur, the sell-off in the front-month contract was a result of expectations of Indian buyers beginning to shift towards other competing oils like soybean and sunflower, as India lifted the import duties.
India is the world’s biggest buyer of edible oil. Dalian's most-active soy oil contract climbed 0.9%, while the palm oil contract rose 1.3%, stated a Reuters report.
Losses have, however, been limited as uncertainties over Indonesia's policy of obligatory domestic sales at a certain price level have hampered the resumption of exports, even as the country lifted a three-week ban on shipments, starting Monday.
Besides, India’s move to allow duty-free import of crude soybean and sunflower oil for two years will also aid in cooling heightened domestic prices, as local edible oil rates have been rallying over the past months, more so after the Russia-Ukraine crisis.
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