Palm prices end higher due to Indonesia's increased levy and weak Malaysian production
Malaysian palm oils closed higher on Wednesday, after Indonesia reaffirmed its intention to increase the palm oil export tax. Malaysia's lower production figures have however limited gains.
The benchmark contract for palm oil delivery in June on the Bursa Derivatives exchange gained 22 ringgit or 0.5% to 4,388 Ringgit ($990.07).
The futures market resumed on a bullish note, mainly because Indonesia reaffirmed an increase in export taxes for palm oil. The weaker Malaysian performance of palm oil exports in the first half of march is still limiting gains, said Anilkumar bagani, head research at vegetable oils broker Sunvin Group.
A plantation fund official announced on Tuesday that Indonesia would increase its palm oil export tax from 3% up to 7.5% to fund a mandated rise in the amount used to make biodiesel.
AmSpec Agri is an independent inspection company that reports that exports of Malaysian products containing palm oil fell by 10.1% between March 1-15 to 396.865 tons, while Intertek Testing Services reported a 7.5% drop to 420.677 metric tonnes.
A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia had maintained its 10% April export tax on crude palm oil and increased its reference price.
Dalian's palm oil contract, which is the most active contract, fell 0.73% while soyoil prices dropped 0.3%. Chicago Board of Trade soyoil prices were flat.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
(source: Reuters)
