Malaysian palm oil futures edged down on Friday as the market digested recent news of Malaysia's plans to re-impose taxes on palm oil exports and traders prepared for the Lunar New Year long weekend next week. By Friday's close, the benchmark April contract had edged down 0.04 percent to 2,293 ringgit ($641) per tonne, and ended the week down 2.3 percent. Total traded volume stood at 48,093 lots of 25 tonnes, above the usual 35,000 lots.
"Come March they will be imposing taxes, so that piece of news is actually bearish," a trader with a foreign brokerage in Kuala Lumpur said referring to news on Malaysia's plans to resume taxing exports of crude palm oil in March that were seen supporting prices on Thursday. "Today is more or less an adjustment of the situation. If it wasn't for the Dalian moving up I think our market would have dropped a lot more," the trader said.
In competing markets, the most active May soybean oil contract on the Dalian Commodity Exchange rose 1.72 percent, while the US soyoil contract for March gained 0.34 percent. "One of the main reasons for the aggressive movement of late is the buying up of palm oil for the festive season, because during the holiday most of the plantations will be closed and there will be no production," the trader said.
He noted the market had begun to slow as the Malaysian commodities bourse will close on Thursday and Friday next week. Technicals showed palm oil may end its current rebound from the February 11 low of 2,270 ringgit around resistance at 2,320 ringgit, Reuters market analyst Wang Tao said. Top buyer India's palm oil imports in January dropped more than one fifth from a month earlier to 658,670 tonnes as refiners increased overseas purchases of sunflower and soyoil.
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