26 August 1999
India’s edible oil traders hit problems
A NUMBER of Indian edible oil importers have started defaulting on contracts, reports the Financial Times.
Some importers were caught out after signing a large number of forward contracts in May when world oil prices were running high on expectation of further price rises.
Prices have since collapsed in the wake of a Chinese switch from oils to oilseeds, designed to give protection to its domestic processing industry.
Pakistan also created problems by raising the customs duty twice over the past year and defaults could reach US$689 million (£431m), according to one estimate.
Shipment and payment problems are reported to have arisen in contracts relating to soyabean, sunflower and cottonseed oils.
Imports of oils so far in excess of the shortfall in India are keeping the prices low in the country.
This has hit Indian growers who are not getting the governments fixed minimum prices for oilseeds.
- Indian oil millers want seed imports, FWi, 22 July, 1999
- Financial Times 26/08/99 page 26