Malaysia palm oil ends higher but gains capped
Malaysia palm oil ends higher but gains capped
KUALA LUMPUR (Reuters): Malaysian palm oil futures closed
higher on Friday on short covering but prices were capped by
technical selling, traders said.
The benchmark third-month January futures KPOF1] contract
ended up 10 ringgit at 864 ringgit (US$227.37) a ton after
trading as high as 870.
Traders said news that India had yet to decide on raising
import duties on edible oils kept the market in positive
territory. Prices were earlier supported by overnight gains in
Chicago soyoil futures.
"The Indian news helped the market at least for now. But
people know India will raise the duties, it's just a matter of
when," said one trader in Kuala Lumpur.
He said uncertainty over the Indian duties could limit price
movements in the near term.
India said it will make an early decision on raising import
duties on edible oils but set no date for the announcement.
The food, finance and agriculture ministries were currently
discussing the matter, Food Minister Shanta Kumar told Reuters.
Traders expect a duty increase in November because domestic
availability of edible oils would be at its highest at that time
with the crushing of the domestic winter oilseeds crop.
India raised the import duty on palm olein to 44 percent in
June from 33 percent.
The 2000/01 (April-March) Indian budget allows for import
duties on edible oils to be increased to 100 percent.
India was the biggest buyer of Malaysian palm oil in 1999,
taking about 2.3 million tons or a quarter of Malaysia's total
exports. The bulk of Malaysia's palm oil exports to India are in
the form of palm olein.
Physical palm oil prices also firmed but traded in a narrow
range.
November (south) crude palm oil was offered at 845 ringgit a
ton against bids of 835, and traded at 835 to 840 ringgit.
Among refined products, November RBD palm oil was offered at
$235 a ton FOB and December at $240.
There were offers for November RBD palm olein at $255 and
December at $260.
November RBD palm stearin was offered at $190 and November
palm fatty acid distillate at $135.