KUALA LUMPUR: Malaysian palm oil futures dipped on Thursday, weighed down by profit-taking, while traders awaited clarity on Indonesia’s potential revisions to its palm oil export levy.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange had slid 15 ringgit, or 0.32%, to 4,657 ringgit ($1,051.72) a metric ton by the midday break.
The contract rose 3.73% in the previous session.
The market traded lower after shedding some of its gains made on Wednesday, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.
Bagani added that market speculation regarding Indonesia’s palm oil export restrictions ahead of Ramadan and the possibility of India raising its vegetable oil import tax from 10% to 15% were also instilling volatility in the market.
Dalian’s most-active soyoil contract rose 0.48%, while its palm oil contract added 2.15%. Soyoil prices on the Chicago Board of Trade were up 0.3%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Cargo surveyors are expected to release Malaysian palm oil export estimates for February 1-20 later in the day.
The ringgit, palm’s currency of trade, strengthened 0.29% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices edged lower after an industry report showed a build in US crude stockpiles and as tariff concerns weighed on sentiment.
Weaker crude prices make palm a less attractive option for biodiesel feedstock.
Malaysia maintained its March export tax for crude palm oil at 10% and lowered its reference price to 4,390.37 ringgit ($988.38) per ton, a circular on the Malaysian Palm Oil Board website showed.
Palm oil may revisit its February 19 high of 4,695 ringgit, as a bounce from 4,489 ringgit looks incomplete, Reuters technical analyst Wang Tao said.
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