Malaysia palm oil extends gains on short covering

Malaysia palm oil extends gains on short covering

KUALA LUMPUR (Reuters): Malaysian palm oil futures extended gains by the close on Thursday on short covering and expectations of lower output in the first quarter of this year, traders said.

News from Pakistan that it will review a request for higher duty on palm oil imports only in mid-February also continued to boost prices.

The benchmark third-month March futures contract ended up 16 ringgit at 805 ringgit (US$211.84) a ton, its highest closing level in four weeks.

News that Indonesia might cut its export taxes on palm oil this month to boost exports had no impact on the market.

"They have been talking about this for some time and the market has discounted it," said another trader.

Indonesia, the world's second largest palm oil producer after Malaysia, currently imposes a five percent export tax on crude palm oil and a two percent tax on Refined, Bleached and Deodorized (RBD) Palm Oil, RBD palm olein and crude olein.

Physical January (south) crude palm oil was offered at 750 ringgit a ton against bids of 740. Trade was at 725 to 745.

February (south) was offered at 780 ringgit against bids of 775 and trade at 770 to 780.

Among refined products, January RBD palm oil was offered at $220 a ton FOB and February at $225.

There were offers for January RBD olein at $225 and February at $230.

January RBD palm stearin was offered at $200, and January palm fatty acid distillate at $175.