JAKARTA: Malaysian palm oil closed up on Wednesday after Indonesia’s reaffirmation to raise its palm oil export levy, although Malaysia’s weaker production data has capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.5%, to 4,388 ringgit ($990.07) a metric ton at the close.
“The futures resumed trading on a bullish note mainly due to Indonesia’s reaffirmation of an increase in palm oil export levies. However, the weaker Malaysian palm oil export performance in palm oil production in first half of March is still capping gains,” said Anilkumar Bagani, head of research at vegetable oil broker Sunvin Group. Indonesia will raise its palm oil export levy 4.5%-10% of the crude palm oil reference price, up from 3% to 7.5%, to finance a mandated increase in the amount of the oil used in biodiesel, a plantation fund official said on Tuesday.
According to independent inspection company AmSpec Agri, exports of Malaysian palm oil products fell 10.1% to 396,865 tons during March 1-15, while Intertek Testing Services said it fell 7.5% to 420,677 metric tons.
Malaysia has maintained its April export tax for crude palm oil at 10% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed on Wednesday.
Dalian’s most-active soyoil contract fell 0.3%, while its palm oil contract lost 0.73%. Soyoil prices on the Chicago Board of Trade were traded flat. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
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