Malaysia announcing it will raise export taxes on crude palm-oil shipments in
March sent futures on Malaysia’s derivatives exchange lower Friday.
The benchmark April contract at Bursa Malaysia Derivatives ended 0.4% lower
at 2,486 ringgit a metric ton after moving in a MYR2,476-MYR2,521/ton range.
In a circular issued Friday the government said it will set CPO export duties
at 4.5% in March after two consecutive months of no duties that boosted crude
shipments from Malaysia and helped to ease stockpiles.
Data from cargo surveyor Intertek Agri Services showed that crude shipments
have doubled in the first 15 days of February to 229,610 tons as a result of an
export-tax advantage Malaysian exporters had over top producer Indonesia.
Overall Feb. 1-15 shipments rose 18% from the previous month to 673,555 tons,
Intertek said. Another surveyor, SGS (Malaysia) Bhd., pegged shipments for the
period at 649,045 tons–up 14%.
Indonesia set February CPO duties at 9% from 7.5% previously.
"CPO exports in March are likely to be much lower due to the 4.5% tax rate
and Indian importers have bought quite a fair bit in January. Palm oil port
stocks at Indian ports are also filing up–so we expect buying to slow down
soon," said Chandran Sinnasamy, head trader at Kuala Lumpur-based LT
International.
Palm oil's bearish technical cues and improving crop weather in parts of
Argentina and Brazil added to the weaker tone in palm oil. Palm oil is a direct
substitute of soy oil.
"Palm oil values have traded in the MYR2,217-MYR2,615/ton range the past four
months and bullish traders failed to take prices past MYR2,615/ton for the
technical landscape to turn convincingly bullish. Therefore, I believe prices
are poised to ease back to MYR2,400/ton in the short term," Mr. Sinnasamy said.
In the cash market refined palm olein for February was offered at $850/ton
while cash CPO for prompt shipment was offered at MYR2440/ton.
Open interest on the BMD was 170,163 lots versus 174,821 lots Thursday. One
lot is equivalent to 25 tons.
A total of 28,733 lots of CPO were traded versus 20,263 lots Thursday.
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