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.