MARKET DEVELOPMENT
Palm oil at new high on tax fears
Palm oil at new high on tax fears
6/6/07 (The News, Pakistan) - KUALA LUMPUR: Malaysian palm futures climbed 1.7 per cent on Tuesday, setting a new high as firm soyoil and expectations that the Indonesian government would increase export taxes on the commodity boosted the market.
Traders said the prices were also supported by the possibility that the Indian government would further slash customs duties on palm oil. By the midday break, the benchmark August contract was up 43 ringgit, or 1.7 per cent, at a new high of 2,644 ringgit ($777) a tonne, surpassing a high of 2,605 ringgit reached on Friday.
“The bullish news from Indonesia and India shows that demand for palm oil will rise,” said one trader. “And strong soyoil prices in Asia have been supportive as well.” Nearby months would remain higher over concerns of tight supplies at home and strong growth in export demand, traders said.
Other traded months rose between 25 and 45 ringgit. Overall trade slipped to 3,733 lots of 25 tonnes each, slightly more than half of what is usually traded by the end of the morning session. In electronic trading during Asian hours on Tuesday, the July soyoil contract was up 0.45 per cent at 35.91 cents per lb by 0521 GMT. Malaysian palm oil usually tracks the US soyoil market because both commodities are used in products ranging from glue and fuel to margarine. Palm oil has gained close to 33 per cent this year on dwindling supplies at home and robust demand from top importers India and China.
It surged 40 per cent last year, mainly on the back of biodiesel demand. The Indonesian government is widely expected to increase the export duty for palm oil products if efforts to rein in domestic cooking oil prices do not succeed.
Traders said the prices were also supported by the possibility that the Indian government would further slash customs duties on palm oil. By the midday break, the benchmark August contract was up 43 ringgit, or 1.7 per cent, at a new high of 2,644 ringgit ($777) a tonne, surpassing a high of 2,605 ringgit reached on Friday.
“The bullish news from Indonesia and India shows that demand for palm oil will rise,” said one trader. “And strong soyoil prices in Asia have been supportive as well.” Nearby months would remain higher over concerns of tight supplies at home and strong growth in export demand, traders said.
Other traded months rose between 25 and 45 ringgit. Overall trade slipped to 3,733 lots of 25 tonnes each, slightly more than half of what is usually traded by the end of the morning session. In electronic trading during Asian hours on Tuesday, the July soyoil contract was up 0.45 per cent at 35.91 cents per lb by 0521 GMT. Malaysian palm oil usually tracks the US soyoil market because both commodities are used in products ranging from glue and fuel to margarine. Palm oil has gained close to 33 per cent this year on dwindling supplies at home and robust demand from top importers India and China.
It surged 40 per cent last year, mainly on the back of biodiesel demand. The Indonesian government is widely expected to increase the export duty for palm oil products if efforts to rein in domestic cooking oil prices do not succeed.