Malaysian crude palm oil futures rebounded from early losses to close higher on Wednesday, helped by September 1-15 export data from cargo surveyor SGS and news that India will likely announce a 10 percent cut in base import prices of all edible oils.
A drop in rival Chicago soyoil futures and smaller-than-expected export figures for the first half of September from another cargo surveyor Intertek Testing Services (ITS) weighed on early palm oil prices, dealers said.
The benchmark third-month November crude palm oil contract on the Malaysia Derivatives Exchange ended up five ringgit, or 0.3 percent, at 1,461 ringgit ($384.47) a tonne after trading as low as 1,432.
Overall volume was a heavy 9,171 lots, while open interest stood at a record 33,997 contracts. ITS estimated Malaysian export of oil palm products for September 1-15 at 627,933 tonnes, up just 12.3 percent from the 558,915 tonnes shipped in August 1-15.
But Societe Generale de Surveillance (SGS), whose figures are more closely watched by the market, later said it estimated exports at 675,647 tonnes, up 24 percent from a month earlier.
A senior Indian finance ministry official said on Wednesday the cut in base import prices would be notified by Friday, adding that the move was part of the government's plan to curb domestic inflation. "The move is seen as positive as it will make the oil more affordable for Indian importers," said a trader in Kuala Lumpur.
India, the world's largest edible oil importer, buys palm oils mainly from Malaysia and Indonesia and soybean oil from Argentina and Brazil.
It imports nearly half of its annual edible oil needs of more than 10 million tonnes. India fixes base prices to check the government's revenue losses due to under-invoicing by some importers.
Traders pay import duties on base values irrespective of the prices at which they purchase oils.
The last revision on palm oils was made in November last year.
In the physical crude palm oil market, the September contract saw buyers/sellers at 1,545/1,550 ringgit a tonne in Malaysia's southern and central regions, unchanged from Tuesday's close. Trades were reported at 1,550-1,545 ringgit in both regions. October saw bids/offers at 1,525/1,535 ringgit. No trade was reported.
PALM OIL FUTURES:
September (south): 1550.
Open/High/Low: 1450/1472/1432.
Previous close: 1550.
PALM OIL PHYSICALS:
November (3rd month): 1461.
Previous settlement: 1456 as sellers' quote.
FUTURES:
Third-month November up five ringgit to 1,461 ringgit ($384.47) a tonne.
PHYSICALS:
September offer price flat.