Edible oil stocks rise by up to 10% after Indonesia bans palm oil export

Manufacturers’ stocks of edible oils soared today after Indonesia, the world’s biggest exporter of palm oil, announced a ban on its exports from April 28. Indonesia’s ban on palm oil exports will drive up edible oil prices, which has already boiled over due to the ongoing Russian-Ukrainian war.

Rising prices are likely to increase margins for domestic edible oil producers, which will positively affect their inventory sentiment.

Shares of Ajanta Soya climbed 5% to Rs 299.75 in early trading today. Shares of Ajanta Soya are trading above the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

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Shares of Adani Group company Adani Wilmar soared 5% to an all-time high of 802.80 rupees on BSE. The company’s market capitalization crossed Rs one lakh crore for the first time today.

Shares of India’s largest edible oil maker, Ruchi Soya, soared 8.47% to Rs 1,030 on BSE. While Raj Oil Mills’ stock climbed 10% to Rs 82.75, Vijay Solvex’s share climbed 5% to Rs 2187.85.

Shares of Agro Tech Foods gained 2.11% to Rs 873.7 and shares of Gokul Agro Resources rose 5% to Rs 107 in early trading.

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The announcement to ban the export of palm oil aims to contain the prices of edible oil in the Indonesian domestic market. India sources 45% of its annual palm oil needs from Indonesia. Pakistan and Bangladesh import almost 80%. As in India, prices in Pakistan and Bangladesh also increased.

Rasheed JanMohd, chairman of the Pakistan Edible Oil Refiners Association (PEORA), said, “No one can compensate for the loss of Indonesian palm oil. Every country will suffer,” as a Reuters report mentions.

Palm oil is the most widely used vegetable oil in the world and is used in the manufacture of many products, including cookies, margarine, laundry detergents and chocolate.

Palm oil export ban: how will it affect India and should India be concerned?

Steve R. Hansen