KL palm oil gains on technical rebound

KL palm oil gains on technical rebound

KUALA LUMPUR (Reuters): A technical rebound lifted Malaysian palm oil futures on Tuesday in anticipation of fresh gains in Chicago and market-friendly exports figures for the first 20 days of June, traders said.

Pakistan's decision to increase the sales tax on import duties of all edible oils to 20 percent from 15 percent starting next month was factored in by the market, they said.

"The market is still bullish on more purchases by China because of the drought there. The June 1-15 exports figures looked okay and people expect the next data to show similar increases," said one trader in Kuala Lumpur.

Cargo surveyors Intertech Testing Services (ITS) and Societe Generale de Surveillance Malaysia (SGS) are scheduled to release the export figures for the first 20 days of June on Wednesday.

Malaysia's palm oil exports stood at 453,336 tonnes from 429,985 in June 1-15, according to the SGS.

"The market finally discounted Pakistan's import duty news because we've been hearing rumours in the morning the sales tax will be increased to 20 percent," said another trader.

Pakistan is one of the main buyers of Malaysian palm oil, taking 1.09 million tonnes in 2000 and 1.02 million in 1999.

At the close on Tuesday, the new benchmark third-month September contract was up 15 ringgit at 821 ringgit ($216.05), the day's high.

Volume was 1,339 lots.

In the physical sector, June/July crude palm oil (CPO) for the southern region was offered at 815 ringgit a tonne against bids at 810. Trades were done at 810.

June/July (CPO) for the central region saw offers at 815 ringgit against bids of 810. Trade was reported at 805 to 810.

Among refined products, July/Aug RBD palm oil was offered at $232.50 a tonne FOB.

There were offers for July/Aug RBD olein at $250, and July RBD palm stearin was offered at $185. June palm fatty acid distillate was offered at $147.50.