Palm oil gained on speculation that Malaysia may increase exports of refined oils to India after the world’s biggest buyer said it will tax unprocessed cooking oils for the first time since 2008.
The contract for delivery in April climbed 0.9 percent to close at 2,400 ringgit ($797) a metric ton on the Malaysia Derivatives Exchange. Futures rose 1.4 percent this week, the first such advance in three weeks.
Crude palm and soybean oil imports will be taxed at 2.5 percent, while the tariff on purchases of refined cooking oils will be maintained at 7.5 percent, India’s Agriculture Ministry said in a statement yesterday. The benchmark price for calculating the tariff will be changed for the first time since 2006 on all cooking oils on a fortnightly basis, the government said in another statement on its website.
“India’s import tax on crude palm oil may favor Malaysia as we have an edge over Indonesia in exports of refined oils,” said Paramalingam Supramaniam, director at Pelindung Bestari Sdn. in Kuala Lumpur.
Indonesia, the biggest supplier of palm oil to India, may lose its market share because of the taxes, keeping its stockpiles high, Susanto, head of marketing at Indonesian Palm Oil Association, said in an e-mail today. Crude palm oil imports totaled 5.99 million tons out of a total crude cooking oil purchases of 8.4 million tons in the year ended Oct. 31, according to the Solvent Extractors’ Association of India.
“April futures could find good support in the 2,365 ringgit to 2,375 ringgit a ton range and test resistances near 2,525 ringgit to 2,550 ringgit a ton,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt. Ltd., wrote in a report today.
Refined palm oil for delivery in May rose 0.5 percent to close at 6,746 yuan ($1,085) a ton on the Dalian Commodity Exchange. Soybean oil for September rose 1.2 percent to end at 8,782 yuan a ton.
Soybeans for March delivery gained 0.3 percent to $14.34 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March lost 0.3 percent to 51.36 cents a pound.