Palm Oil Declines to Two-Week Low After Malaysia Sets Export Tax
Palm oil fell to a two-week low after Malaysia, the second-largest producer, said that exports in March will be taxed for the first time in three months.
The contract for April delivery fell as much as 0.6 percent to 2,481 ringgit ($802) a metric ton on the Malaysia Derivatives Exchange, the lowest price since Jan. 30, and was last at 2,482 ringgit. Futures are set for the first weekly loss in five.
The tax on crude palm oil exports will be 4.5 percent for March after shipments were allowed at zero duty in January and February, according to a Customs Department statement on the Malaysian Palm Oil Board website today. That’s less than the 9 percent tax set by Indonesia for this month.
“The tax is perceived as a negative factor that would reduce competitiveness,” said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “We’re still competitive if you compare with the Indonesian export duty.”
Exports from Malaysia climbed 18 percent to 673,555 tons in the first 15 days of February from the same period a month ago, surveyor Intertek said today. Inventories in Malaysia slid 1.9 percent to 2.58 million tons last month from a record 2.63 million tons in December, the palm oil board said Feb. 13. Output fell 10 percent to 1.6 million tons, while exports slid 1.6 percent to 1.62 million tons.
Soybean oil for May delivery was little changed at 52.07 cents a pound on the Chicago Board of Trade. Soybean oil is about 1.43 times costlier than palm oil.
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