New IMO rule worrying Indian vegetable oil importers
Indian vegetable oil importers fear that a new International Maritime Organization regulation may increase their freight costs $20 per ton, the Economic Times of India reported Wednesday.
The new IMO rule, which went into effect Monday, requires all shipments of vegetable oil to be transported in double-hull and double-bottom tanker ships. The rule is worrying Indian importers, the news report said, because a preponderance of vegetable oil from South America still comes via single-hull tankers. The news agency said tankers with double hulls have increased their share in Malaysia and Indonesian palm oil exports from 53 percent in 2005 to 60 percent in 2006, but that only 16 percent of soy oil from South America is transported by double-hull tankers.
'There are enough double-hull tankers in the market, so supply is not an issue,' the Economic Times quoted Abjiheet Roy, managing director of Dubai-based Tradex Chartering and executive director of the Association of Bombay Ship Brokers. 'Though there may be a psychological 10 percent correction initially, eventually the market will find its level. Prices are fairly bearish anyway.'