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.