MARKET DEVELOPMENT
CPO Surges to RM2,068, Boost from Scrapping of Export Tax
CPO Surges to RM2,068, Boost from Scrapping of Export Tax
08/09/2014 (The Star) - Crude palm oil (CPO) for third month delivery surged to an intra-day of RM2,068 per tonne on Monday as sentiment perked up after the government scrapped export duty for September and October.
At 3.19pm, it was up RM21 to RM2,046.
CIMB Equities Research viewed Malaysia's decision to exempt CPO from export taxes in the two months as positive for CPO exports in the near term as the CPO export tax will be much lower compared to Indonesia's 9% for September 2014.
“However, this is negative for Malaysian refiners as it will erode their competitiveness against Indonesia's refiners in September.
“This measure will help keep palm oil stocks manageable but may not be able to lift the current bearish sentiment engulfing the CPO market due to concerns over rising edible oil supply in the coming months.
“Furthermore, there is a possibility that Indonesia will cut its CPO tax rate to zero in Oct if CPO prices stay below US$750 (RM2,385) per per tonne,” it said, as it retained its Neutral sector rating.
At 3.19pm, it was up RM21 to RM2,046.
CIMB Equities Research viewed Malaysia's decision to exempt CPO from export taxes in the two months as positive for CPO exports in the near term as the CPO export tax will be much lower compared to Indonesia's 9% for September 2014.
“However, this is negative for Malaysian refiners as it will erode their competitiveness against Indonesia's refiners in September.
“This measure will help keep palm oil stocks manageable but may not be able to lift the current bearish sentiment engulfing the CPO market due to concerns over rising edible oil supply in the coming months.
“Furthermore, there is a possibility that Indonesia will cut its CPO tax rate to zero in Oct if CPO prices stay below US$750 (RM2,385) per per tonne,” it said, as it retained its Neutral sector rating.