KL palm oil extends gains on soyoil profits
KL palm oil extends gains on soyoil profits
KUALA LUMPUR (Reuters): Malaysian palm oil futures extended their gains on Monday on the back of further strength in Chicago soyoil futures, traders said.
The benchmark third-month February futures contract ended up 22 ringgit at 870 ringgit (US$228.95) a ton.
Market volume, however, fell to 1,082 lots against 2,286 on Friday, as concern over large domestic stocks and prospects of slower exports limited buying interest.
"The rise is likely to be temporary as stocks are still high and exports could fall due to competition from Indonesia," said one trader in Kuala Lumpur.
Traders said a weakening rupiah currency and depressed local buying interest could boost palm oil exports from Indonesia, the world's second largest producer after Malaysia.
Indonesian Finance Minister Prijadi Praptosuhardjo said on Monday the government had not yet decided if it would abolish export taxes on palm oil.
But he said there were discussions between his office and the trade and industry ministry on the possibility of cutting the taxes to help boost exports as a result of abundant domestic supply and tighter competition in the world market.
Trade and Industry Minister Luhut Pandjaitan said on Friday Indonesia planned to scrap the taxes on palm oil exports in January to boost exports.
Indonesia currently imposes a five percent export tax on crude palm oil and two percent on RBD palm oil, RBD palm olein and crude olein.
Soyoil futures on the Chicago Board of Trade (CBOT) strengthened further on Friday on the prospect of increased exports if the European Union decided to ban the use of animal fats in feed rations.
Soyoil ended 0.18 to 0.30 cent higher, with January up 0.23 at 15.26 cents.
Physical December (south) crude palm oil was offered at 825 ringgit a ton against bids at 820, and trade was reported at 810 to 822.50.
Among refined products, December RBD palm oil was offered at $237.50 a ton FOB and January at $242.50.
There were offers for December RBD palm olein at $252.50 and January at $257.50.
December RBD palm stearin was offered at $215 and December palm fatty acid distillate at $170.