Malaysian crude palm oil futures ended down on Thursday but off their lows after a hike in refined palm oil duties by top buyer India came in at the lower end of market expectations.
India, the world's largest edible oils importer, said in a federal budget announcement on Thursday it had raised import tariffs on refined palm oil to 75 percent from 70 percent previously.
But it maintained the duty on crude palm oil at 65 percent.
Traders had expected a hike of 10-15 percent in both categories of oils.
"I must say this is a surprise," a trader told Reuters as palm oil futures on the Malaysia Derivatives Exchange (MDEX) climbed from their lows on the news.
Still, MDEX's benchmark contract, September ended the day eight ringgit lower at 1,436 ringgit ($377.89) a tonne as fundamentals for palm oil remained weak in the near-term.
"Whatever numbers we're seeing now on supply-and-demand aren't encouraging," said another trader.
The market's main forecaster Ivan Wong has so far painted a bleak picture for palm oil in June, saying output could be up six percent month-on-month while exports drop about three percent.
Aside from September, other MDEX contracts closed on Thursday six to 28 ringgit down.
The market opened down after a lacklustre performance in Chicago soyaoil on Wednesday. Soy and palm compete for the same export markets and their prices often move in step.
Total futures transactions on Thursday stood at 8,475 lots compared with Wednesday's 7,671 lots.
Cash prices of crude palm oil also eased after being steady in the morning on fresh demand for spot cargoes. The cash contract for July saw buyers/sellers closing at 1,485/1,490 ringgit a tonne in the southern and central regions. The contract was quoted at 1,490/1,500 at midday and during Wednesday's close.
Trades were reported at 1,490-1,485 ringgit in both regions.
Physical palm oil for August was bid/offered at 1,465/1,480 ringgit, against Wednesday's quote of 1,475/1,485. Trade was reported in the south at 1,470.
PALM OIL FUTURES:
July (south): 1490.
Open/High/Low: 1446/1451/1418.
Previous close: 1500.
PALM OIL PHYSICALS:
September (3rd month): 1436.
Previous settlement: 1444.
FUTURES:
Benchmark third-month September down eight ringgit at 1,436 ringgit ($377.89) a tonne.
PHYSICALS: Also down.
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