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Palm oil exports from Malaysia, the second-largest producer, fell 25 percent in the first 10 days of this month, according to Intertek, stoking speculation reserves may hold near a record even after a new tax regime took effect.
Exports dropped to 373,462 metric tons from 499,732 tons in the same period last month, Intertek said in a statement today. A separate estimate of shipments from surveyor Societe Generale de Surveillance is due later today, as are official figures for stockpiles, exports and production in December.
The Malaysian government said in October it would cut the export tax to between 4.5 percent and 8.5 percent, from 23 percent, effective Jan. 1, to help reduce the reserves, which reached an all-time high in November. The tariff for this month was set at zero as the base price was below the threshold of 2,250 ringgit a ton that triggers the 4.5 percent rate. Palm oil has dropped 25 percent over the past year.
“January may be a bit too soon to really see the impact,” said Hoe Lee Leng, an analyst at RHB Capital Bank Bhd. “People are not rushing off to export directly and take advantage of the zero percent tax for this month yet” as some planters may continue to sell to local refiners, she said.
Palm oil for March delivery rose as much as 0.9 percent to 2,433 ringgit ($801) ton on the Malaysia Derivatives Exchange, then pared gains after the Intertek estimate was issued. The price was at 2,419 ringgit at 11:52 a.m. in Kuala Lumpur.
Inventories of the oil used in food and biofuels were 2.56 million tons in November, according to data from the Malaysian Palm Oil Board. The figure for last month may be 2.53 million tons, according to the median of estimates from six analysts and two plantation companies in a Bloomberg survey.
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