Palm oil edges lower on weaker rivals, higher export taxes

SINGAPORE: Malaysian palm oil futures edged lower on Wednesday, weighed down by weakness in rival oils and the country's move to raise export taxes for the commodity.

The benchmark palm oil contract for March delivery on the Bursa

Malaysia Derivatives Exchange fell 2 ringgit, or 0.1%, to 3,409 ringgit ($839.24) in early trade. The contract gained 0.3% on Tuesday.

The weakness in palm oil was mainly due to cheaper rival oils elsewhere, a Kuala Lumpur-based trader told Reuters.

Soyoil on the Chicago Board of Trade was last down 0.1% after rallying overnight as a labour strike in Argentina entered its 13th day.

On the Dalian Commodity Exchange, soyoil fell 0.6% and palm oil declined 0.8%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Malaysia has raised its January export tax for crude palm oil to 8% from 6.5% in December, a circular on the Malaysian Palm Oil Board website showed on Tuesday.

Palm oil may retest a support at 3,381 ringgit per tonne, a break below which could cause a fall to 3,300 ringgit, Reuters analyst Wang Tao said.