KUALA LUMPUR: Malaysian palm oil futures rose to a one-week high on Wednesday, stretching gains into a fourth day as top grower Indonesia moved closer to laying on levies which may make its palm more expensive for importers.
The Southeast Asian country plans to impose a levy of
$50/tonne when the crude palm oil export tax is zero, where the
money gained be used to fund new biodiesel subsidies and
policies. The regulation will be implemented once approved by
President Joko Widodo.
"Once the levy is in place, free-on-board crude palm oil
prices will take a jump, so (futures) prices will be supported,"
said one palm trader with a foreign commodities brokerage in
Kuala Lumpur.
Market players say the levy will help boost confidence in
the key producer to carry out its ambitious biofuel plans and
soak up excess supplies of palm in the market.
"The levy is the precursor - it is seen as a first step
forward to the implementation of the local biodiesel programmes,
and that is the bullish factor right now," the Kuala
Lumpur-based trader added.
The benchmark June contract on the Bursa Malaysia
Derivatives Exchange touched a one-week high of 2,181 ringgit in
late trade, before settling at 2,161 ringgit ($584) a tonne by
the day's close, up 0.6 percent.
Total traded volume stood at 51,767 lots of 25 tonnes, above
the usual 35,000 lots.
Malaysia, the world's second-largest palm grower, will
remove its crude palm oil export tax for the month of May
against a 4.5 percent rate imposed in April, a government
circular showed late Tuesday.
The decision could delay buying interest for the crude grade
to next month, traders said.
Malaysian palm shipments for the first half of April fell 3
percent to between 470,058-477,295 tonnes compared with the same
period in March, according to cargo surveyors Intertek Testing
Services and Societe Generale de Surveillance.
In vegetable oil markets, the U.S. soyoil May contract
rose 0.4 percent in early Asian trade, while the most
active September soybean oil contract on the Dalian
Commodity Exchange gained 2.4 percent.
Brent crude oil prices rose above $59 a barrel on Wednesday
amid tension in the Middle East and signs of a dip in U.S.
production, but gains were capped by a report from the
International Energy Agency (IEA) indicating that supplies would
take longer to tighten than previously expected.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 0 +0.00 0 0 0
MY PALM OIL MAY5 2172 +6.00 2172 2199 2343
MY PALM OIL JUN5 2161 +13.00 2152 2181 20257
CHINA PALM OLEIN SEP5 4720 +62.00 4662 4734 747760
CHINA SOYOIL SEP5 5570 +128.00 5440 5588 1307738
CBOT SOY OIL MAY5 31.39 +0.10 31.24 31.65 11605
INDIA PALM OIL APR5 435.70 +0.10 435.50 438.60 548
INDIA SOYOIL APR5 603.80 +1.75 603.00 605.50 4095
NYMEX CRUDE MAY5 54.05 +0.76 53.39 54.25 33002
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.7030 Malaysian ringgit)
($1 = 6.2052 Chinese yuan)
($1 = 62.41 Indian rupees)
- Reuters
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