Malaysian Crude Palm Oil (CPO) futures have been witnessing heavy selling pressure in last few days amid broad worries pertaining to the global trade wars and general selling pressure on commodities- particularly the crude oil prices. The CPO futures for September dropped around 2.60% to trade at RM 2247 per tonne on Bursa Malaysia Derivatives Exchange. These are lowest levels for the commodity in around two years. Supplies are seen elevated in coming months and the market is also concerned about Indian farmers increasing their kharif oilseeds sowing, thereby limiting the purchases of overseas edible oils.
Palm oil is the most widely consumed edible oil by volume in India, with a share of around 40-42%, followed by soybean and mustard oils. However, domestic production of palm oil is limited, and over 95% of the requirement is imported, mostly from the worlds top two producers – Indonesia and Malaysia. Crude palm oil imports constitute over 60% of the edible oil imports basket.
Meanwhile, the benchmark MCX CPO futures are currently trading down 1.30% at Rs 631 per 10 kgs.