Crude Palm Oil - Agriculture commodities

Crude Palm Oil Trading in India

Crude Palm Oil is a type of comestible vegetable oil obtained from the fruit of the Oil Palm tree or Elaeis guineensis. Palm oil is one of the few vegetable oils known to be rather high in saturated fats, and it comes close to soybean oil as one of the most widely-produced vegetable oils in the world. Together, Malaysia and Indonesia account for over 80% of world production of Crude Palm Oil, with most of that produced intended for export. Crude Palm Oil futures are actively traded on the Bursa Malaysian Derivatives (BMD), and futures also trade on the Mumbai Multi-Commodity Exchange or MCX for the product. 

 What makes Crude Palm Oil good investment?

•  Crude Palm Oil is used as vegetable oil. Crude Palm oil is the second largest source of vegetable oil.

•  Crude Palm Oil is also used for biodiesel.

•  Crude Palm Oil caters to many industries such as food manufacturers, producers and processors of palm oil, international trading/merchandising firms, and bio-fuel companies.

 Why is Crude Palm Oil a wise investment for an Indian trader?

• India is the one of the largest importer of Crude Palm Oil in the world.

• India is dependent on palm oil imports for over 30% of its annual edible oil requirement and more than 65% of India's annual edible oil imports.

• Crude Palm Oil futures contract was launched on MCX platform in 2004 and has witnessed considerable volatility since its launch.

• Food processors can hedge ingredient prices for product that will be purchased at a later date.

• Volatility in prices arising due to changing supply-demand scenario necessitates hedging to cover price risk.

• CPO futures are ideal for price risk management needs of the processors, traders, physical participants and end users.

• Crude Palm Oil contract is highly liquid and provides easy entry and exit to a speculator. Thus the Crude Palm Oil contract provides space for every investor category.