Speculative buying lifts Malaysian palm oil

Speculative buying lifts Malaysian palm oil

KUALA LUMPUR (Reuters): Speculative buying lifted Malaysia's palm oil futures on Tuesday on expectations that the government will soon announce the list of companies which will be allowed to export crude palm oil duty-free this year.

The benchmark third position November futures contract ended up 14 ringgit at 1,013 ringgit ($266.57) a ton, after trading as low as 996.

Volume was 1,263 lots against 1,451 lots at the close on Monday.

Traders pegged immediate support at 995 ringgit and resistance at 1,030.

Traders said the concession to export CPO duty-free would not help reduce stocks in the Malaysian market unless traders decided to cut prices in order to win back buyers now attracted by cheaper Indonesian products.

Traders said stocks were building up in the country's refineries because of slack demand.

Rumors have circulated in the Malaysian market that the government plans to allow eight companies to export CPO duty-free in response to Indonesia's move to axe export taxes on CPO and its by-products this month.

But Indonesia's Finance Minister Bambang Sudibyo said on Monday the government had not yet decided whether to abolish the CPO tax.

Traders said the physical side was active on Tuesday ahead of a duty-free announcement.

Physical Aug (south) crude palm oil was offered at 955 ringgit a ton against bids of 950, and traded from 940 to 950. Aug (central) crude palm oil was traded at 945 to 950.

Sep (south) was offered at 980 ringgit against bids of 975. Trade was reported at 970 to 975. Sep (central) was traded at 975.

Among refined products, Sep RBD palm oil was offered at $275 a ton FOB, Oct at $280 and Nov/Dec at $287.50.

There were offers for Sep RBD palm olein at $292.50, Oct at $297.50 and Nov/Dec at $305.

Sep RBD palm stearin was offered at $220 and Sep palm fatty acid distillate at $185.