VEGOILS - Palm oil prices settle higher despite uncertainty over Indonesia's export tax and US tariff threats
Malaysian palm futures recovered from early losses on Friday to record a second weekly gain. A stronger Chicago soyoil, a weaker dollar, and market uncertainty about Indonesia's export rate and U.S. Tariff threats offset the gains.
The benchmark contract for palm oil delivery in April on Bursa Derivatives Exchange closed at 4290 ringgit (US$964.04), up 11 ringgit or 0.26%. The contract rose 1.76% after rising 0.62% last week.
Paramalingam Supramaniam of Selangor's brokerage Pelindung Bestari said that the possibility of a reduction of 9% to 10% in Indonesian crude oil export levies, and President Donald Trump’s threat of tariffs against Canada and Mexico, have created market uncertainty.
Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, expressed concern over the China holiday, as well as a weakening in Malaysian palm oil.
Bagani stated that the market now awaits data on palm oil production and exports from Malaysia for January.
According to cargo surveyors Intertek Testing Services, and independent inspection company AmSpec Agri Malaysia, exports of Malaysian products containing palm oil for January fell between 12.3% to 20.1% compared to a month earlier.
Chicago Board of Trade soyoil prices were up by 1.29%. Dalian Commodity Exchange will be closed for Lunar New Year from January 28 to February 4 due to the holidays.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
The palm ringgit's trade currency, the dollar, fell by 1.41%, making the commodity more affordable for buyers who hold foreign currencies.
Oil prices were stable on Friday, but are on track for a weekly drop as the markets await to see if U.S. president Donald Trump will follow through with his threat to impose duties on Mexico and Canada over the weekend.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. $1 = 4.4500 Ringgit (Reporting and editing by Eileen Soreng, Subhranshu S. Sahu).
(source: Reuters)
