Palm oil markets seen mixed

Palm oil markets seen mixed

KUALA LUMPUR (Reuters): Asian palm oil markets are likely to be mixed this week with news India may soon cut import duties on edible oils and unexpectedly good Malaysian crop numbers seen triggering some short-covering, traders said.

But news that Indonesia is to lift its palm-oil export ban later this month could continue to dampen prices, they said. Traders said regional markets were also tracking currency movements.

Industry officials in India said on Sunday the country may soon reduce import duties on edible oils from the present level of 22 percent to 12 percent, a factor seen likely to boost sentiment.

Malaysia's Palm Oil Registration and Licensing Authority (PORLA) is scheduled to release March palm oil output/stock/export data on April 15.

Merchant traders estimate output in March to be around 595,000 to 605,000 tons, with stocks at 640,000 tons and exports at 610,000 tonnes -- above previous market expectations.

"I feel there will be short-covering ahead of PORLA's March numbers on Wednesday. But after that, the Indonesian lifting of the export ban would have a dampening factor," a Malaysian trader said.

Indonesia announced on Thursday that it would remove its export ban on crude palm oil, olein and stearin by April 22.

The lifting of the ban would be replaced with an export tax of not more than 40 percent, it said.

He said expectations that Indonesian palm oil exports would be more competitive with the smaller tax had triggered a sell-off.

More impact was expected to be seen this week as regional players digested the news.

Traders in Singapore differed in views after Indonesia's announcement.

"The main factor supporting the market in the past few months is the Indonesian ban. Now the ban will be lifted, people won't be so bullish," one trader in Singapore said.

Another Singapore trader saw a softening market but said the impact would be only short-term.