12 December 2012 10:37 [Source: ICIS news]
SINGAPORE (ICIS)--Freight rates for palm oil vessels travelling from southeast Asia to India and China rose during the week amid tight vessel space, market players said on Wednesday.
Buyers in China are stocking up on the commodity ahead of expected quality control measures starting from January next year, while Indian end-users were preparing to meet their supply requirements for 2012. As a result of high demand vessel space becomes limited, and end-users need to pay a huge premium to secure tonnage.
“[It is] extremely tight. There is a lot of last-minute shipments and enquiries for prompt vessels,” said a southeast Asian charterer.
For the week ending 12 December, palm oil freight rates from southeast Asia to India and China for a 10,000 tonne vessel were quoted as high as $60/tonne (€46/tonne), almost a $15/tonne increase month on month.
“Prices will climb steadily untill the end of the year, but may go down dramatically in January,” another southeast Asian market player said.
Most palm oil cargoes going to China and India originate from Malaysia and Indonesia, the world’s two largest producers.
India and China are the world's two largest importers of palm oil.
($1 = €0.77)
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