KL palm oil closes lower in tight range

KL palm oil closes lower in tight range

KUALA LUMPUR (Reuters): Malaysian palm oil futures ended lower on Friday but were off the day's lows, helped by short covering interest, traders said.

Prices were trapped in a tight range as the market looked for a clear direction.

Traders said a sharp drop in soyoil futures on the Chicago Board of Trade overnight and high stocks in Malaysia weighed on prices.

The benchmark third-month April futures contract closed six ringgit lower at 743 ringgit ($195.53) a tonne after trading in a nine-ringgit range. For the week, it was down 37 ringgit.

The market is now awaiting fresh export data for the first 10 days of February to be released on Monday.

Physical February (south) crude palm oil was offered at 695 ringgit a tonne against bids of 690.

March (south) saw offers at 725 ringgit and bids of 720.

Among refined products, February RBD palm oil was offered at $197.50 a tonne FOB and March at $202.50.

There were offers for February RBD olein at $205 and March at $210. February RBD palm stearin was offered at $182.50 and February palm fatty acid distillate at $180.

News that Indonesia will cut its export taxes on crude palm oil and by-products had no impact on the market.

Indonesia, the world's largest palm oil producer after Malaysia, said it will cut export taxes on crude palm oil (CPO) to three percent from five percent with effect from March 1.

The Indonesian finance ministry said in a decree Reuters obtained on Friday that export taxes on crude olein, refined, bleached and deodorized (RBD) palm oil and RBD palm olein would also be cut to one percent from two percent.

Traders said the move, widely expected by the market, was unlikely to hurt Malaysian palm oil prices.

"It has been discounted by the market as everybody was expecting this. In value terms, the cut is very minimal," said one trader in Kuala Lumpur.