Malaysian palm oil price hits 1-month high after Indonesia signs export levy

KUALA LUMPUR: Malaysian palm oil futures rose for a third day on Wednesday to touch their highest level in a month, following a jump in soy markets, and as investors covered short positions after Indonesia set a palm export levy to fund biodiesel subsidies. 

    Indonesian President Joko Widodo has signed a regulation
requiring exporters to pay a levy of $50 per tonne of crude palm
oil and $30 for processed palm oil product shipments, an energy
ministry official said on Wednesday. 
    The regulation will take effect by the third week of May at
the latest, the chief economic minister said. 
    "It's a rally towards 2,200 ringgit - Indonesia has just
signed the levy," said a palm trader with a local commodities
brokerage in Kuala Lumpur. "There's a technical buy up ... All
this is poised to push prices further to test the 2,200
ringgit."
    The benchmark July contract on the Bursa Malaysia
Derivatives exchange inched up 1.2 percent to 2,183 ringgit 
($611.48) a tonne by the day's close. Prices briefly touched
2,200 ringgit in morning trade, their highest since April 8.    
    Total traded volume stood at 43,791 lots of 25 tonnes each,
well above the usual 35,000 lots.
    Palm typically tracks soyoil, a common food and fuel
substitute. The U.S. July soyoil contract rose 0.9
percent in late Asian trade, while the most active September
soybean oil contract on the Dalian Commodity Exchange
gained 1.3 percent. 
    "The market is flying - look at how soybean oil is
rallying," said a second palm trader in Malaysia. 
    "We're trying to move according to the Dalian which is very
strong," the trader said, adding that a rally in Chinese palm
olein prices also underpinned benchmark prices. The September
contract for palm olein on the Dalian exchange had surged 2.5
percent to 5,162 yuan ($832.57) by 1010 GMT. 
    But rising supplies in Malaysia, the world's second-largest
grower, may dent palm's rally. Inventories at end-April likely
rose to a five-month high of 2.13 million tonnes, a Reuters poll
showed on Wednesday, as crude palm output continued to climb and
outpaced export demand.    
    In other markets, oil prices rose more than a dollar to 2015
highs on Wednesday as a month-long rally gained further impetus
from a fall in U.S. crude stocks and conflict in the Middle
East.              
    
  Palm, soy and crude oil prices at 1013 GMT
                                                                                                                   
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY5    2163   +27.00    2130    2170     126
  MY PALM OIL      JUN5    2190   +31.00    2171    2202    2550
  MY PALM OIL      JUL5    2183   +26.00    2169    2200   24389
  CHINA PALM OLEIN SEP5    5162  +124.00    5056    5206 1360948
  CHINA SOYOIL     SEP5    5946   +74.00    5892    5988 1398154
  CBOT SOY OIL     JUL5   33.34    +2.50   33.06   33.48    9232
  INDIA PALM OIL   MAY5  450.80    +2.50  448.60  453.90    1909
  INDIA SOYOIL     JUN5  598.90    -3.55  597.30  605.00   51665
  NYMEX CRUDE      JUN5   61.91    +1.51   60.62   62.05   42968
                                                                                                                   
  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 = 3.5700 Malaysian ringgit)
 ($1 = 6.2007 Chinese yuan)
 ($1 = 63.55 Indian rupees)
- Reuters