India palm oil freight rates falling on weak demand

08 May 2008 12:16  [Source: ICIS news]

SINGAPORE (ICIS news)--Palm oil freight rates from the Straits to the Indian continent continue to fall due to weak demand from Indian and Pakistan end-users, industry sources said Thursday.

Freight rates to the west coast of India for 12,000-tonne cargoes had fallen $3/tonne (€1.92/tonne) since early April to $38-39/tonne this week. Rates to Pakistan were also down by $3/tonne to $38-39/tonne over the same period.

Rates to the east coast of India fell $1/tonne to $33-34/tonne.

“We are not seeing any enquiries nor any fixtures for May, as most nominations had mostly been covered,” a broker said. "Even if they are not covered, there will be much domestic supply from soybean crops, which can be used to replace plam oil."

“Some players expect demand in June to pick up,” another source added, "but I really doubt so as palm oil stocks are high and there are much stocks from substitutes oil."

"We have been trying very hard to clinch any business for the past two weeks, but there are just no interest from any of the buyers," he added.

“Shipowners also cannot do much about the freight rates although bunker oil prices are at such high levels on record crude prices as they are pressured by an ample tonnage situation and easily squeezed by charterers who will definitely depress rates,” a source lamented.

($1 = €0.65)

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By: Desmond Chia
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