Indonesia, the world’s largest exporter of palm oil, had announced a ban on its exports from April 28, 2022. Oil prices are already on the boil amid the Russia -Ukraine war and this ban will push the prices of edible oils higher.
While the ban will pinch the pockets of many people, the rise in prices is likely to increase the margins further for edible oil producers in India. Apart from this, it will positively affect the sentiments in their stocks.
The share price of Adani Wilmar has zoomed nearly 82.58% in the past month. In the past five days alone, its share price has increased by 18.08%. On Thursday’s early trades the stock reached a high of ₹ 878 apiece. It is currently trading at ₹848.40 apiece.
Similarly, the share price of Ruchi Soya has given 43.19% returns in the last month, and 23.36% in the last five days. Currently, the share is trading at ₹ 1165.55 apiece and had reached a high of ₹1168.50 on Thursday’s early trades.
Ruchi Soya’s Sanjeev Kumar Asthana is not overly worried about the Indonesian palm oil ban as he said, “My view is that these bans typically do not last long because they are a response to the inflationary situation within the country. The supply tends to pick up very quickly with a 10-15 day kind of lag. Hopefully, this should not be an extended ban and we should see a resolution pretty soon on this front.”
As per reports, the companies have adequate stocks that might be required in the short term. But they will have to see how long the situation will last and what will be the impact the supply chain.
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