Edible oil stocks rise up to 10% after Indonesia bans export of palm oil

Stocks of edible oil manufacturers zoomed in early trade today after Indonesia, the world's largest exporter of palm oil, announced a ban on its export from April 28. The ban on palm oil exports by Indonesia will push the prices of edible oils higher, which have already been on the boil due to the ongoing Russia-Ukraine war.

The rise in prices is likely to lift margins for edible oil producers at home, which will positively affect sentiment in their stocks.

Shares of Ajanta Soya climbed 5 per cent to Rs 299.75 in early trade today. Ajanta Soya stock is trading higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

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Stock of Adani Group firm Adani Wilmar zoomed five per cent to hit an all-time high of Rs 802.80 on BSE.  Market cap of the firm crossed Rs one lakh crore for the first time ever today.

Shares of largest manufacturer of edible oil in India Ruchi Soya rallied up to 8.47 per cent to Rs 1,030 on BSE. While stock of Raj Oil Mills zoomed 10 per cent to Rs 82.75, Vijay Solvex share climbed five per cent to Rs 2187.85.

Agro Tech Foods shares gained 2.11 per cent to Rs 873.7 and stock of Gokul Agro Resources rose 5 per cent to Rs 107 in early trade.

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The announcement to ban export of palm oil is aimed at containing edible oil prices in the Indonesian domestic market. India sources 45 per cent of its annual palm oil needs from Indonesia. Pakistan and Bangladesh import nearly 80 per cent. Like India, prices in Pakistan and Bangladesh have also increased.

Rasheed JanMohd, chairman of Pakistan Edible oil Refiners Association (PEORA) said, "Nobody can compensate for the loss of Indonesian palm oil. Every country is going to suffer," as mentioned in a report in Reuters.

Palm oil is the world's most widely used vegetable oil and is used in the manufacture of many products including biscuits, margarine, laundry detergents and chocolate.

Palm oil export ban: How will it impact India and should India worry