Malaysian palm oil futures fell from a two week high in evening trade on Thursday, charting a first session of losses in five, on the back of profit taking activities. The market was earlier up on a weaker ringgit, but a sharp decline in crude oil prices capped gains.
The ringgit, palm's currency of trade, weakened 0.2 percent against the dollar to 4.1410 in the evening, making the vegetable oil cheaper for foreign buyers. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange had risen as much as 0.7 percent to 2,181 ringgit before losing its gains. It was last down 0.7 percent at 2,151 ringgit ($519.44) a tonne at the end of the trading day.
Trading volumes stood at 32,479 lots of 25 tonnes each at the close of trade. "The market is coming off on some profit taking," said a Kuala Lumpur-based trader. Palm was previously trading at two week highs on news of India's palm oil import tax reduction, as a lower tax could spur demand.
While palm prices could be supported by rising demand, another trader had earlier said that export data was yet to reflect that as the new ruling had been implemented this week.
India, the world's largest importer of edible oils, said on Monday it would lower the duty on crude palm oil imports to 40 percent from 44 percent, while a tax on refined oils was cut to 50 percent from 54 percent.
Malaysian shipments of refined palm oil, however, will be taxed at 45 percent compared with 54 percent earlier.
Oil prices slipped on Thursday amid volatile currency and stock markets, and as analysts warned of an economic slowdown for 2019 amid rising crude supplies globally. In other related oils, the Chicago March soyabean oil contract rose 0.3 percent, while the January soyabean oil contract on the Dalian Commodity Exchange jumped 2.9 percent.
Meanwhile, the Dalian January palm oil contract gained 2.4 percent. Palm oil prices are impacted by changes in soyaoil prices, as they compete for a share in the global vegetable oil market.
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