MARKET DEVELOPMENT
VEGOILS-Palm Hits Lowest in Nearly 6 Weeks on Malaysia's Export Tax Decision
VEGOILS-Palm Hits Lowest in Nearly 6 Weeks on Malaysia's Export Tax Decision
(Updates prices, adds graf on Indonesian tax break offer)
* Malaysia raises April crude palm oil export tax to 4.5 pct
* Malaysia's March 1-15 palm oil exports down 3-5 pct m/m - cargo surveyors
17/03/2015 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly six weeks on Monday, after a decision by the second-largest producer to impose export taxes next month fuelled worries that price-sensitive buyers would switch to rival edible oils.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange tumbled as much as to 2,172 ringgit ($586) a tonne in early trade, its lowest since Feb. 4, before ending the session at 2,199 ringgit, down 1.7 percent.
Malaysia, the world's No.2 supplier of palm oil, said on Monday it would raise export duties for the crude grade to 4.5 percent for April, ending a duty-free policy held since September.
The decision made market participants jittery that the additional tax could further curb demand for the tropical oil.
"With the imposition of the export tax, market direction is looking a little murky," said Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari.
"Market continues to reel from demand concerns ... the huge U.S. carryout and South American output will put downward pressure on palm prices."
Cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for the first half of March fell 3.4 percent compared to Feb. 1-15, as India and Europe cut back purchases.
Another cargo surveyor Societe Generale de Surveillance showed exports for the same period fell 5.2 percent.
Total traded volume on Monday stood at 50,354 lots of 25 tonnes, much higher than the usual 35,000 lots.
Analysts said palm prices, however, may draw support from a decision by Indonesia to raise its biodiesel blend to 15 percent from 10 percent as early as next week, aimed at boosting use of palm-based biodiesel.
"We estimate that a 15 percent blend could potentially raise Indonesia's biodiesel consumption to 5.5 million kilolitres per annum, from 1.8 million kilolitres in 2014," CIMB analyst Ivy Ng said in a note on Monday.
The top producer may also introduce tax breaks for crude palm oil producers to support the mandate, energy ministry officials said on Monday.
Elsewhere, Brent crude oil fell to around $54 a barrel on Monday, its lowest for more than a month, on rising global inventories and signs of a possible nuclear deal with Tehran that could allow more Iranian oil exports.
In vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange lost 1.5 percent in late Asian trade, while the U.S. soyoil contract for May was down 0.3 percent.
Palm, soy and crude oil prices at 1020 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2211 -36.00 2181 2231 1593
MY PALM OIL MAY5 2210 -38.00 2180 2228 13817
MY PALM OIL JUN5 2199 -37.00 2172 2215 22775
CHINA PALM OLEIN SEP5 4650 -74.00 4536 4734 505634
CHINA SOYOIL SEP5 5378 -82.00 5270 5444 524046
CBOT SOY OIL MAY5 30.39 -4.20 30.19 30.50 8135
INDIA PALM OIL MAR5 446.60 -4.20 445.10 449.00 676
INDIA SOYOIL APR5 583.50 +0.00 579.00 588.30 24510
NYMEX CRUDE APR5 44.70 -0.14 43.57 45.00 45253
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 = 3.7035 Malaysian ringgit)
($1 = 6.2624 Chinese yuan)
($1 = 62.82 Indian rupee)
* Malaysia raises April crude palm oil export tax to 4.5 pct
* Malaysia's March 1-15 palm oil exports down 3-5 pct m/m - cargo surveyors
17/03/2015 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly six weeks on Monday, after a decision by the second-largest producer to impose export taxes next month fuelled worries that price-sensitive buyers would switch to rival edible oils.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange tumbled as much as to 2,172 ringgit ($586) a tonne in early trade, its lowest since Feb. 4, before ending the session at 2,199 ringgit, down 1.7 percent.
Malaysia, the world's No.2 supplier of palm oil, said on Monday it would raise export duties for the crude grade to 4.5 percent for April, ending a duty-free policy held since September.
The decision made market participants jittery that the additional tax could further curb demand for the tropical oil.
"With the imposition of the export tax, market direction is looking a little murky," said Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari.
"Market continues to reel from demand concerns ... the huge U.S. carryout and South American output will put downward pressure on palm prices."
Cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for the first half of March fell 3.4 percent compared to Feb. 1-15, as India and Europe cut back purchases.
Another cargo surveyor Societe Generale de Surveillance showed exports for the same period fell 5.2 percent.
Total traded volume on Monday stood at 50,354 lots of 25 tonnes, much higher than the usual 35,000 lots.
Analysts said palm prices, however, may draw support from a decision by Indonesia to raise its biodiesel blend to 15 percent from 10 percent as early as next week, aimed at boosting use of palm-based biodiesel.
"We estimate that a 15 percent blend could potentially raise Indonesia's biodiesel consumption to 5.5 million kilolitres per annum, from 1.8 million kilolitres in 2014," CIMB analyst Ivy Ng said in a note on Monday.
The top producer may also introduce tax breaks for crude palm oil producers to support the mandate, energy ministry officials said on Monday.
Elsewhere, Brent crude oil fell to around $54 a barrel on Monday, its lowest for more than a month, on rising global inventories and signs of a possible nuclear deal with Tehran that could allow more Iranian oil exports.
In vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange lost 1.5 percent in late Asian trade, while the U.S. soyoil contract for May was down 0.3 percent.
Palm, soy and crude oil prices at 1020 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2211 -36.00 2181 2231 1593
MY PALM OIL MAY5 2210 -38.00 2180 2228 13817
MY PALM OIL JUN5 2199 -37.00 2172 2215 22775
CHINA PALM OLEIN SEP5 4650 -74.00 4536 4734 505634
CHINA SOYOIL SEP5 5378 -82.00 5270 5444 524046
CBOT SOY OIL MAY5 30.39 -4.20 30.19 30.50 8135
INDIA PALM OIL MAR5 446.60 -4.20 445.10 449.00 676
INDIA SOYOIL APR5 583.50 +0.00 579.00 588.30 24510
NYMEX CRUDE APR5 44.70 -0.14 43.57 45.00 45253
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 = 3.7035 Malaysian ringgit)
($1 = 6.2624 Chinese yuan)
($1 = 62.82 Indian rupee)