Malaysia palm oil closes higher on duty-free news
Malaysia palm oil closes higher on duty-free news
KUALA LUMPUR (Reuters): Malaysian palm oil futures closed higher on Monday, boosted by news that Malaysia may allow local companies to export crude palm oil (CPO) duty-free this year, traders said.
Private forecaster Ivan Wong's crop estimates for July also lifted market sentiment, they said.
The benchmark third position October futures contract ended up 21 ringgit at 1,043 ringgit ($274.47) a ton.
"The duty news lifted the market, and prices were also helped by Ivan Wong's latest crop figures," said one trader in Kuala Lumpur.
Primary Industries Minister Lim Keng Yaik said on Monday Malaysia, the world's largest producer and exporter of palm oil, was considering the removal of duties on CPO exports this year. He also said Malaysia may allow more than four exporters this year to export CPO without duty.
The concession was given to four companies last year. Malaysia's export tax is currently based on a graduated scale starting with 10 percent on prices above 600 ringgit a ton.
Wong said on Monday Malaysia's palm oil output was estimated to have risen three percent to 843,000 tonnes in July from 817,613 in June.
He put stocks at the end of July at 1.075 million tonnes against 1.04 million at end-June. Wong earlier projected July production at 880,000-885,000 tonnes and end-July stocks at 1.09 million tonnes.
But the Kuala Lumpur trader said Monday's rise could be temporary. "The fundamental outlook is not encouraging. Production is expected to pick up in coming months while export demand is still weak," he said.
Physical prices also strengthened but a lack of sellers restricted activity.
Aug (south) crude palm oil was offered at 1,030 ringgit a ton against bids of 1,025. It traded from 1,010 to 1,025.
Among refined products, Aug RBD palm oil was offered at $285 a ton FOB, Sep at $290 and Oct/Nov/Dec at $300. There were offers for Aug RBD palm olein at $305, with Sep at $310 and Oct/Nov/Dec at $320.
Aug/Sep RBD palm stearin was offered at $232.50 and Aug/Sep palm fatty acid distillate at $192.50.