Malaysian palm oil closes at new low

Malaysian palm oil closes at new low

KUALA LUMPUR (Reuters): Malaysian palm oil futures closed at their lowest in over 13 months as players liquidated positions due to worries about sales following Indonesia's decision to cut export taxes.

Traders said concern over growing domestic stocks and weaker Chicago soyoil futures overnight also weighed on prices.

The benchmark third-month November futures contract ended down 18 ringgit at 972 ringgit ($255.79) a ton, its weakest level since July 30, 1999.

Volume increased to 1,759 lots against 845 on Tuesday.

"Sentiment is very weak and players simply liquidate their positions. The market could go lower," said one trader.

Traders pegged immediate support at 950 ringgit.

Indonesian Finance Minister Prijadi Praptosuhardjo on Tuesday signed a decree cutting export tax on crude palm oil to five percent from 10 percent, effective immediately.

The decree also cut export taxes on crude olein to two percent from eight percent and refined bleached deodorized palm olein to two percent from six percent. It also reduced the export tax on RBD palm oil to two percent from six percent.

Malaysian traders said the tax cuts would encourage more exports from Indonesia, the world's second largest producer after Malaysia, and spark stiffer competition between the two countries in the international market.

Prices also eased ahead of this week's exports, output and stocks data, traders said.

The official Malaysian Palm Oil Board will issue its August figures on Friday.

Cargo surveyors Societe Generale de Surveillance Malaysia Sdn Bhd and Intertech Testing Services will also release on Friday exports data for September 1-15. On Thursday, private forecaster Ivan Wong will issue his final estimates of August exports, stocks and output.

Physical prices also fell due to a lack of demand for refined products coupled with ample supplies.

Sept (south) crude palm oil was offered at 940 ringgit a ton against bids of 935. It traded from 950 to 940.

Sept (central) was offered at 935 ringgit against bids of 930, and trades were reported at 945 to 930.

Among refined products, Sept RBD palm oil was offered at $260 a ton FOB, Oct at $262.50 and Nov/Dec at $265.

There were offers for Sept and Oct RBD palm olein at $282.50, and Nov/Dec at $287.50.

Sept/Oct RBD palm stearin was offered at $202.50 and Sept/Oct palm fatty acid distillate was offered at $170.