InvestorQ : Can you throw some light on how palm oil as a commodity gets traded?
Pavithra Prabhakaran made post

Can you throw some light on how palm oil as a commodity gets traded?

Answer
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Mitali Bhutta answered.
2 years ago


Palm oil is extracted from the palm fruits and is one of the most popular edible oils. Palm oil has a natural reddish colour due to its high beta carotene content. With increasing health consciousness in Indian and in many other countries, palm oil is increasingly becoming more popular. Compared to coconut oil and palm kernel oil that have saturated fats in excess of 85%, palm oil has saturated fats only to the tune of 41%. Today there has been a major shift in the consumption pattern of edible oil in India. While groundnut oil used to be the key consumption in India, today more than 70% of edible oil is accounted for by imported oils like soya bean oil and palm oil. The entire growth in edible oils is coming through palm oil and soya bean oil only.

The palm oil consumption in India is rising rapidly but the production predominantly happens in other countries. As a result there is the need to manage risk for importers, warehouses and for processors. The MCX Crude Palm Oil (CPO) futures offer a good way to manage this risk.