Malaysian palm oil slips

Malaysian palm oil futures fell on Thursday on worries over slower overseas demand after top producer Indonesia revised its export tax structure that could make its shipments cheaper and on caution over the global economy. Indonesia, the world's top palm oil producer, will cap its export tax for the edible oil at 22.5 percent from 25.0 percent previously, a trade ministry official said on Thursday.
The changes, which take effect from October 1, could make shipments cheaper than those from the world's No 2 producer, weighing on Malaysian palm oil futures. "The Malaysian market fell because Indonesia has made changes that makes its own exports more competitive now," said a trader with a foreign commodities brokerage in Kuala Lumpur. The benchmark November crude palm oil contract on Bursa Malaysia Derivatives fell as much as 1.9 percent to 2,978 ringgit ($1,000.504) a tonne before paring some losses to end 1.4 percent lower.
Overall traded volume was 20,899 lots of 25 tonnes each, below the usual 25,000 lots. Palm oil has lost about 20 percent so far this year thanks to a stock build and financial markets turning volatile over the grim economic outlook. Many markets are looking for some new cues from US Federal Reserve Chairman Ben Bernanke's speech on Friday and any failure to offer a clear hint of further monetary easing may trigger a fresh sell-off.
Technicals look positive. Reuters analyst Wang Tao said palm oil is expected to hover around support at 3,030 ringgit per tonne, before rising towards 3,074 ringgit. Exports posted solid growth with cargo surveyor Intertek Testing Services reporting August 1-25 palm oil shipments rose 6.3 percent to 1.36 million tonnes from a month ago. Another surveyor, Societe Generale de Surveillance, showed exports up 5.5 percent over the same period. Higher exports are likely to bring stocks well below 2 million tonnes as production falters with mostly Muslim estate workers taking extended leave for Eid celebrations in late August.
Grains and other vegetable oil prices came under pressure on expectations of ample supply and caution ahead of Bernanke's speech at Jackson Hole. US soyoil for September delivery slipped 0.8 percent during Asian hours, and the most active May 2012 soyoil contract on China's Dalian Commodity Exchange inched 0.4 percent lower.