Palm oil slips

Malaysian palm oil eased on Friday from a one-week high hit earlier in the day, but posted its first weekly gain in five as the government's move to exempt the commodity from export taxes buoyed expectations of a recovery in exports. Palm oil futures added more than 5 percent this week, the most since November, with a strong rally on Thursday after Malaysia exempted crude palm oil (CPO) from export taxes in September and October.
"Malaysian planters are hoping to boost exports after tax exemption and take some of the market share from Indonesia," said a Kuala Lumpur-based trader. "Refiners are also actively buying CPO because they fear that they might not get supplies if producers start exporting CPO directly." The benchmark November contract on the Bursa Malaysia Derivatives Exchange finished down 2 ringgit at 2,028 ringgit ($637) per tonne, after hitting 2,041 ringgit, its highest since August 27, earlier in the session.
Traded volume stood at 62,494 lots of 25 tonnes each, almost double the daily average of 35,000 lots. The exemption from export duties, which had been set at 4.5 percent for September, is expected to increase palm oil exports by 600,000 tonnes over the two months and reduce stock levels to 1.6 million tonnes by the end of the year, the nation's commodities ministry said in a statement.
Shipments of Malaysian palm oil products fell 4.8 percent from a month earlier to 1,288,117 tonnes in August, cargo surveyor Intertek Testing Services said on Tuesday, but recovered from steeper losses earlier in the month as a surge in demand from India offset weaker imports by China and Europe. Malaysian palm oil stocks at the end of August likely jumped to their loftiest in seven months as higher output due to crop-friendly weather outstripped poor export demand, a Reuters survey showed on Thursday.
On the technical front, palm oil may retrace to 1,968 ringgit per tonne as it failed to break resistance at 2,046 ringgit, according to Reuters market analyst Wang Tao. Resistance is at the 300 percent Fibonacci projection level of a downward wave 3 which started at the July 7 high of 2,424 ringgit. It could have triggered a correction towards the 361.8 percent projection level at 1,968 ringgit. The US soyoil contract for December edged up in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange added 0.2 percent.