Palm slides as India hikes import tax on edible oils
17/09/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures slipped on Tuesday, when the market reopened after a holiday, weighed downby India's decision to raise its import tax on edible oils.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange was down 60 ringgit, or 1.59%, at 3,715 ringgit ($868.60) a metric ton by the midday break.
The contract shrunk 2.2% last week.
Malaysian palm oil futures slipped due to India hiking import duty, a Kuala Lumpur-based trader said.
India, the biggest importer of edible oils, imposed a 20% basic customs duty on crude palm oil, crude soyoil and crude sunflower oil from Sept. 14.
The move will effectively increase the total import duty on the three oils to 27.5% from 5.5% as they are also subject to India's Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.
Oil prices extended gains on Tuesday as the market eyed U.S. output concerns in the aftermath of Hurricane Francine and expectations of lower U.S. crude stockpiles.O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.14%. China's Dalian Commodity Exchange was closed for a holiday.
Palm oil prices tracks rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit MYR=, palm's currency of trade, strengthened 0.49% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Malaysia maintained its October export tax for crude palm oil at 8% and lowered its reference price, per a circular on the Malaysian Palm Oil Board website.
Palm oil may test support zone of 3,782-3,796 ringgit per metric ton, a break below could trigger a drop to 3,759 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2770 ringgit)