JAKARTA: Indonesian palm oil producers are whittling down their hefty inventory overhang with discounts versus rivals and aggressive sales to India, where demand is picking up for next month's Diwali festival, industry officials said.
"India has been aggressively buying palm oil from Indonesia since prices are attractive and festival demand is approaching," said Sandeep Bajoria, the chief executive of vegetable oil brokerage and consultancy Sunvin Group.That would be triple India's palm oil imports from Indonesia, the world's largest producer, in the previous four months, from April to July, according to data compiled by trade body The Solvent Extractors' Association of India .
The stocks were built up during Jakarta's steady escalation of export restrictions early this year, culminating in the drastic three-week export ban. Sunvin Group's Bajoria noted that soyoil and sunoil, usually substantially more expensive than palm oil, became comparable in price for a few months and squeezed demand from India.
"Indonesian sellers are now trying hard to regain the lost market share by offering discounts," a New Delhi-based palm oil dealer said. "Right now, Indonesia sellers are very competitive compared to Malaysia. They are giving a discount of up to US$5 per tonne under Malaysia," said a Mumbai-based dealer with a global trading firm.