Palm oil ended little changed near the lowest level in three weeks after Malaysia, the second-largest producer, said it will allow duty-free exports of the crude variety for a second month in February to boost shipments.
The contract for delivery in March closed at 2,370 ringgit ($786) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur, after rising as much as 1.4 percent. Futures fell 4 percent last week to end at 2,368 ringgit, the lowest price at close since Dec. 20.
Malaysia, which has a record inventory amid falling exports, has set the tax for shipment of crude oil at zero, Plantation Industries and Commodities Minister Bernard Dompok said in Kuala Lumpur today. The country changed its export-tax structure from Jan. 1 to reduce reserves. Stockpiles rose 2.4 percent an all-time high of 2.63 million tons in December from a revised 2.57 million tons a month earlier, according to the Malaysian Palm Oil Board.
“News that Malaysia is going to extend the zero export tax for February is positive for exports,” Chung Yang Ker, an analyst at Phillip Futures Pte., said from Singapore. “Prices will continue to come under pressure because of higher stockpiles.”
Exports dropped 25 percent to 373,462 tons in the first 10 days of January from a revised 499,732 tons in the first 10 days of December, Intertek said last week. Shipments retreated 34 percent, according to Societe Generale de Surveillance.
Refined palm oil for delivery in May increased 0.9 percent to end at 6,698 yuan ($1,077) a ton on the Dalian Commodity Exchange. Soybean oil for May rose 0.5 percent to close at 8,530 yuan a ton.
Soybeans for March delivery gained 1.5 percent to $13.935 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March advanced 1.3 percent to 49.88 cents a pound.