MARKET DEVELOPMENT
VEGOILS-Palm Gains, Traders Snap up Indonesian Shipments Before Tax Levy
VEGOILS-Palm Gains, Traders Snap up Indonesian Shipments Before Tax Levy
(Updates prices)
* Indonesia plans levy of $50/T on crude palm oil exports
* Rushed buying out of Indonesia lifts palm futures - trader
* Levy could lower CPO prices in Indonesia, but could translate to better biodiesel demand - analyst
24/03/2015 (Reuters) - Malaysian palm oil futures rose on Monday as Indonesia's plan to impose levies on crude palm exports triggered hasty buying from the top producer, although traders say gains are "unsustainable" as the tropical oil battles with dwindling global demand.
Indonesian officials are preparing new rules for a charge of $50 on every tonne of crude palm oil (CPO) shipped at a zero export tax rate, with the funds going to help pay for biodiesel subsidies announced in recent weeks. The measure is pending approval by President Joko Widodo who will return from his overseas trips on March 30.
The key palm grower, which supplies around 52 percent of the world's palm oil, has set its crude palm oil export tax for March at zero, unchanged since October last year.
"This buying is because people want to avoid the $50 levy before the bill is signed by Jokowi," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Once the speculative buying is over, then it will be bad.
Who wants to pay so high when there know there's a lot of supply in Indonesia? These are very short-term, unsustainable gains."
The benchmark June contract on the Bursa Malaysia Derivatives had inched up 1.2 percent to 2,186 ringgit ($592) a tonne by Monday's close, pausing a losing streak that had dragged prices to their biggest weekly drop since November last week.
Total traded volume stood at 40,932 lots of 25 tonnes, higher than the average 35,000 lots.
Analysts say while the potential tax levy could lower CPO prices in Indonesia and be negative for pure upstream palm oil players in the short term, it could underpin prices if the measure is successful in boosting biodiesel demand.
"This levy could be a medium-term positive for CPO players, if it is successful in boosting biodiesel demand, resulting in stronger CPO prices," said CIMB's Ivy Ng in a note on Monday.
In other markets, oil prices fell further on Monday, with Brent dropping below $55 a barrel, after top exporter Saudi Arabia said it would only consider cutting output if other producers outside OPEC did so too.
The U.S. soyoil contract for May was up 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange rose 0.6 percent.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2190 +22.00 2173 2210 282
MY PALM OIL MAY5 2192 +25.00 2180 2212 5760
MY PALM OIL JUN5 2186 +26.00 2173 2208 22095
CHINA PALM OLEIN SEP5 4730 +16.00 4642 4744 714462
CHINA SOYOIL SEP5 5452 +30.00 5372 5464 570804
CBOT SOY OIL MAY5 30.91 +1.90 30.66 30.96 6861
INDIA PALM OIL MAR5 440.00 +1.90 439.30 442.80 382
INDIA SOYOIL APR5 583.60 +1.30 583.50 586.90 12365
NYMEX CRUDE MAY5 45.60 -0.97 45.33 46.44 31870
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 = 3.6945 Malaysian ringgit)
($1 = 6.2160 Chinese yuan)
($1 = 62.33 Indian rupee)
* Indonesia plans levy of $50/T on crude palm oil exports
* Rushed buying out of Indonesia lifts palm futures - trader
* Levy could lower CPO prices in Indonesia, but could translate to better biodiesel demand - analyst
24/03/2015 (Reuters) - Malaysian palm oil futures rose on Monday as Indonesia's plan to impose levies on crude palm exports triggered hasty buying from the top producer, although traders say gains are "unsustainable" as the tropical oil battles with dwindling global demand.
Indonesian officials are preparing new rules for a charge of $50 on every tonne of crude palm oil (CPO) shipped at a zero export tax rate, with the funds going to help pay for biodiesel subsidies announced in recent weeks. The measure is pending approval by President Joko Widodo who will return from his overseas trips on March 30.
The key palm grower, which supplies around 52 percent of the world's palm oil, has set its crude palm oil export tax for March at zero, unchanged since October last year.
"This buying is because people want to avoid the $50 levy before the bill is signed by Jokowi," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Once the speculative buying is over, then it will be bad.
Who wants to pay so high when there know there's a lot of supply in Indonesia? These are very short-term, unsustainable gains."
The benchmark June contract on the Bursa Malaysia Derivatives had inched up 1.2 percent to 2,186 ringgit ($592) a tonne by Monday's close, pausing a losing streak that had dragged prices to their biggest weekly drop since November last week.
Total traded volume stood at 40,932 lots of 25 tonnes, higher than the average 35,000 lots.
Analysts say while the potential tax levy could lower CPO prices in Indonesia and be negative for pure upstream palm oil players in the short term, it could underpin prices if the measure is successful in boosting biodiesel demand.
"This levy could be a medium-term positive for CPO players, if it is successful in boosting biodiesel demand, resulting in stronger CPO prices," said CIMB's Ivy Ng in a note on Monday.
In other markets, oil prices fell further on Monday, with Brent dropping below $55 a barrel, after top exporter Saudi Arabia said it would only consider cutting output if other producers outside OPEC did so too.
The U.S. soyoil contract for May was up 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange rose 0.6 percent.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2190 +22.00 2173 2210 282
MY PALM OIL MAY5 2192 +25.00 2180 2212 5760
MY PALM OIL JUN5 2186 +26.00 2173 2208 22095
CHINA PALM OLEIN SEP5 4730 +16.00 4642 4744 714462
CHINA SOYOIL SEP5 5452 +30.00 5372 5464 570804
CBOT SOY OIL MAY5 30.91 +1.90 30.66 30.96 6861
INDIA PALM OIL MAR5 440.00 +1.90 439.30 442.80 382
INDIA SOYOIL APR5 583.60 +1.30 583.50 586.90 12365
NYMEX CRUDE MAY5 45.60 -0.97 45.33 46.44 31870
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 = 3.6945 Malaysian ringgit)
($1 = 6.2160 Chinese yuan)
($1 = 62.33 Indian rupee)