Palm oil dropped after exports from Malaysia, the second-largest producer, fell 25 percent in the first 10 days of this year.
The contract for March delivery fell as much as 0.6 percent to 2,397 ringgit ($789) a metric ton on the Malaysia Derivatives Exchange and was at 2,399 by the close of the morning session. Futures lost 1.6 percent this month, closing on Jan. 8 at 2,390 ringgit, the lowest price since Dec. 20.
Exports decreased to 373,462 tons in the first 10 days of January from 499,732 tons in the same period last month Intertek said in an-emailed statement today. The 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. The tariff for this month was set at zero as the base price was below the threshold of 2,250 ringgit a ton. The new tax regime was aimed at boosting shipments and cutting inventories.
“More exports may be going out from Indonesia” as they’re still cheaper, said Rajesh Modi, a trader at Singapore-based Sprint Exim Pte. “Exports may gradually recover from here” as Malaysia’s new export tax structure may see more shipments of crude palm oil toward the end of the month, he said.
Stockpiles in Malaysia rose 2.4 percent to a record 2.63 million tons in December, compared with 2.56 million tons a month earlier, the Malaysian Palm Oil Board said in statement, released after the midday close.
India’s imports of crude and refined palm oils probably gained 38 percent to 750,000 tons from 543,830 tons, a Bloomberg survey showed. The Solvent Extractors’ Association of India will publish data next week.
Palm oil for May rose 0.7 percent to 6,852 yuan ($1,101) a ton on the Dalian Commodity Exchange. Soybean oil for May increased 0.7 percent to 8,658 yuan a ton.
Soybeans for March delivery climbed 0.2 percent to $13.8875 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March gained 0.5 percent to 49.90 cents a pound.
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