Malaysia palm oil closes lower, tax move waited

Malaysia palm oil closes lower, tax move waited

KUALA LUMPUR (Reuters): Malaysian palm oil futures closed lower on Wednesday after failing to hold early gains as players consolidated positions and awaited fresh developments.

The benchmark third-month November futures contract ended down 15 ringgit at 1,007 ringgit ($265) a tonne after touching an early high of 1,025.

Primary Industries Minister Lim Keng Yaik said on Tuesday that Malaysia expects to issue licenses by mid-September to several firms to export 500,000 tons of crude palm oil without tax over the next six months.

"The government has been talking about this a lot but people want to see some action," the trader said, adding that the market was also waiting for action from Indonesia.

Indonesian Finance Minister Prijadi Praptosuhardjo confirmed on Tuesday that the government would cut the export tax on crude palm oil to five percent from 10 percent next week.

Indonesia is the world's second largest palm oil producer after Malaysia.

Physical prices also fell back but trading was light.

Sept (south) crude palm oil was offered at 975 ringgit a tonne against bids of 970. It traded from 975 to 970 ringgit.

Among refined products, Sept RBD palm oil was offered at $275 a tonne FOB, Oct at $280 and Nov/Dec at $285.

There were offers for Sept RBD palm olein at $295, Oct at $300 and Nov/Dec at $305.

Sept/Oct RBD palm stearin was offered at $210 and Sept/Oct palm fatty acid distillate at $177.50.