Palm hits near two-week high as India cuts import tax

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Palm hits near two-week high as India cuts import tax

KUALA LUMPUR (Reuters) – Malaysian palm oil futures rose to their highest in nearly two weeks at the midday break of the first trading day of 2019, after world’s largest edible oil importer India announced import tax cuts, amid expectations of a fall in production.

Palm hits near two-week high as India cuts import tax 1

A worker rests under a palm tree at a palm oil plantation in Chisec, Guatemala December 19, 2018. REUTERS/Luis Echeverria/Files

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 1.7 percent at 2,156 ringgit ($521.15) a tonne at the midday break.

It earlier rose as much as 1.8 percent to 2,159 ringgit, its strongest levels since Dec. 21.

Trading volumes stood at 14,848 lots of 25 tonnes each at noon on Wednesday.

“Palm is higher today on India’s import tax cut and production, which is expected to be down for the whole month also,” said a futures trader in Singapore.

Palm oil output in Malaysia, the second largest producer of the vegetable oil, seasonally declines in the first few months of the year after peaking in the previous quarter.

November production had slid 6.09 percent from the previous month to 1.85 million tonnes, according to industry regulator data.

India, the world’s largest importer of edible oils, said late on Monday it would lower the duty on crude palm oil imports to 40 percent from 44 percent, while a tax on refined oils was cut to 50 percent from 54 percent.

Malaysian shipments of refined palm oil, however, will be taxed at 45 percent compared with 54 percent earlier.

Despite the tax cuts, traders expect market gains to be short-lived as palm inventory levels in Southeast Asia remain high.

In other related oils, the January soybean oil contract on the Dalian Commodity Exchange rose 0.6 percent and the Dalian January palm oil contract gained 1.5 percent.

Palm oil prices are impacted by changes in soyoil prices, as they compete for a share in the global vegetable oil market.

Palm, soy and crude oil prices at 0453 GMT:

Contract Month Last Change Low High Volume

MY PALM OIL JAN9 2060 +56.00 2030 2066 69

MY PALM OIL FEB9 2113 +39.00 2090 2118 1169

MY PALM OIL MAR9 2156 +35.00 2132 2159 7130

CHINA PALM OLEIN JAN9 4118 +62.00 3868 4130 2378

CHINA SOYOIL JAN9 4922 +28.00 4846 4922 1014

CBOT SOY OIL JAN9 27.55 +0.00 0 0 0

INDIA PALM OIL JAN9 517.80 +3.80 516.40 519.8 315

INDIA SOYOIL JAN9 733.4 +3.25 731.5 734 1620

NYMEX CRUDE FEB9 44.98 -0.43 44.86 46.00 55614

Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 4.1370 ringgit)

($1 = 69.6880 Indian rupees)

($1 = 6.8564 Chinese yuan)

Reporting by Emily Chow; Editing by Rashmi Aich

Our Standards:The Thomson Reuters Trust Principles.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2019-01-04 18:52:24

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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