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.