Palm hits 3-week low as rival oils dip, India weighs duty hike
12/09/2024 (Reuters),Mumbai - Malaysian palm oil futures fell on Thursday to their lowest level in three weeks, on expectations of an import duty hike by top buyer India and in response to weakness in soyoil and palm oil contracts in the Dalian market.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange was down 46 ringgit, or 1.18%, at 3,855 ringgit ($890.09) a metric ton by the midday break.
"The whole market is buzzing with rumours about an import duty hike in India. People are expecting the hike on all edible oils soon, which could have a bigger impact on palm oil prices," said a Mumbai-based trader.
India is considering an increase in import taxes on vegetable oils to help protect farmers reeling from lower oilseed prices, two government sources told Reuters last month.
Dalian's most-active soyoil contract DBYcv1 fell 0.44%, while its palm oil contract DCPcv1 was down 0.28%. The Chicago Board of Trade soyoil BOc2 edged up 0.05%.
Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil has been losing competitiveness because of falling soyoil prices, said Anilkumar Bagani, the research head of Mumbai-based Sunvin Group.
"The market is waiting for revision in Indonesian palm oil export levies," Bagani said.
Indonesia, the biggest palm oil exporter, plans to lower export duties to improve competitiveness and raise farmers' income.
Malaysia's palm oil stocks jumped to a six-month high in August, as monthly production reached a nine-year high amid a slowdown in exports.
Palm oil is poised to break support at 3,856 ringgit per metric ton and fall towards 3,782-3,796 ringgit range, according to Reuters' technical analyst Wang Tao.