Godrej Agrovet Company Update - Rising Palm Oil Prices Expected To Taper: Motilal Oswal

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Motilal Oswal Report

In this note, we have analysed the recent trends in palm oil prices, the parameters driving these prices, and the corresponding impact on the Palm Oil business of Godrej Agrovet Ltd.– the revenue/Ebitda contribution for which stood at 12%/17% (as of FY21).

Here are the key highlights:

Higher demand from Bio-Diesel segment fuels palm oil prices.

Global palm oil prices have seen a sharp rally, primarily due to higher demand from the Bio-Diesel segment (primarily the U.S. market) and increased demand from China.

Prices of major vegetable oils, such as palm and soybean, have likely already peaked at multi-year highs in 2021.

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