News on China, duty lift Malaysia palm oil prices

News on China, duty lift Malaysia palm oil prices

KUALA LUMPUR (Reuters): Malaysia's palm oil futures saw active short covering on Wednesday after news that China had issued fresh quotas for the import of about 600,000 tons of palm oil this year, traders said.

The possibility that the Malaysian government would announce the list of companies that would be allowed to export crude palm oil next week also supported the market.

"The duty news has of course supported sentiment, but I think the development in the Chinese quotas had a greater role in lifting prices," said one trader in Kuala Lumpur.

The benchmark third position November futures contract ended up four ringgit at 1,017 ringgit ($267.63) a ton, after trading as high as 1,027 ringgit.

Volume was 1,940 lots against 1,263 lots at the close on Tuesday.

Primary Industries Minister Lim Keng Yaik told Reuters on Wednesday the government had not decided yet on the list of the companies to be granted the duty-free concession, but said the government could make a decision next week.

"I will talk to you next week," he said.

Rumors had been rife that the government would announce the list after Prime Minister Mahathir Mohamad's cabinet meeting on Wednesday, and that eight firms were waiting for final approval to export oil without duty.

Traders expected the government to allow exports of 500,000 tons of CPO duty-free from September to December this year.

Traders in China said the country had issued new quotas for the import of about 600,000 tons of palm oil this year. The quotas were the second batch of the year.

In Jakarta, the Indonesian government said it would wait for the formation of a new cabinet before export taxes on CPO, now standing at 10 percent, and its by-products were cut or eliminated. Indonesia announced the new cabinet on Wednesday.

Physical Aug (south) crude palm oil was offered at 970 ringgit a ton against bids of 960. It traded from 960.

Aug (central) crude palm oil also traded at 960.

Sep (south) was offered at 990 ringgit against bids of 980. Trade was reported at 985 to 990. Sep (central) traded at 980 to 990.

Among refined products, Sep RBD palm oil was offered at $280 a ton FOB, Oct at $285 and Nov/Dec at $290.

There were offers for Sep RBD palm olein at $300, Oct at $305 and Nov/Dec at $310.

Sep RBD palm stearin was offered at $217.50 and Sep palm fatty acid distillate at $182.50