Palm Oil Declines on Higher Import Taxes
28/01/2013 (mydigitalfc.com) - Palm oil declined after India implemented higher taxes on crude imports and data showed that shipments this month from Malaysia remained below December’s pace, boosting concern stockpiles will remain near a record.
The contract for delivery in April fell 1.5 per cent to 2,445 ringgit ($803) a tonne on the Malaysia Derivatives Exchange, the biggest decline at close since January 17. Futures climbed 1.9 per cent this week. The benchmark price of crude palm oil was raised to $802 a tonne from $447, India’s Central Board of Excise and Customs said. The rate, on which a 2.5 percent tax is applicable, will be revised every fortnight. The biggest palm oil buyer announced the plan to raise import taxes on January 17.
“There are some concerns that India’s demand may come off” because of the new duty, said Ivy Ng, an analyst at CIMB Group Holdings. Still, the impact may not be significant, as the rate would work out to about $20 a tonne, said Ng.
Exports from Malaysia dropped 14 per cent to 1.1 million tonnes in the first 25 days of this month from the same period in December, Intertek said, while Societe Generale de
Surveillance put the decline at 15 per cent. Malaysia reduced taxes on crude shipments to zero this month, and extended it to February, to clear stockpiles that climbed to 2.63 million tonnes last month.
Financial markets in Malaysia were closed on Saturday and will be shut again on January 28 for another holiday. Sunday’s decline snapped four days of gains and came after prices reached 2,488 ringgit on January 23, the highest since January 4.
Refined palm oil for delivery in September closed little changed at 7,024 yuan ($1,129) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.6 per cent to 8,736 yuan a tonne.
Soybeans for March delivery were little changed at $14.36 a bushel on the Chicago Board of Trade. Soybean oil for March delivery fell 0.2 per cent to 52.03 cents a pound.
In India, crude palm oil for February delivery closed at Rs 445.70 on Friday, down 0.40 per cent over its previous close. Indian commodity markets were closed on Saturday on account of Republic Day.