Crude palm oil prices down as Malaysia export tax policy weighs

23.03.2018

Malaysian palm oil futures slid slightly in early trade on Friday, as disappointment lingered over the government's decision to resume taxing exports of the edible oil.
    
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.73 percent to RM2,432 (US$621.20) per tonne at the midday break. Prices held relatively flat from the week before, inching up just 0.57 percent on week.

Trading volumes were thin at 23,143 lots of 25 tonnes each.

"The market is factoring in news that the government will not extend the suspension of export tax," said David Ng of Phillip Futures in Kuala Lumpur.

"This means exports ahead could be softer as buyers shift over to Indonesia," he added.
    
Malaysia had suspended duties on palm oil exports for three months, and this week announced it would once again impose a duty of 5 percent.
    
Indonesia and Malaysia are the world's two biggest producers of palm oil.

In other related oils, the May soybean oil contract on the Chicago Board of Trade was up 0.16 percent.   
    
On the Dalian Commodity Exchange, the May soybean oil contract inched up 0.18 percent, while the May palm oil contract slid 0.39 percent.
    
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.


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