Palm oil fell to the lowest level in more than two weeks 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 dropped 0.4 percent to 2,486 ringgit ($804) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for most active futures since Jan. 29. Futures declined 2.9 percent this week, 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. Shipments gained 14 percent to 649,045 tons in the first 15 days, according to Societe Generale de Surveillance.
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 declined 1.6 percent to 1.62 million tons.
Soybean oil for May delivery was little changed at 52.14 cents a pound on the Chicago Board of Trade. Soybean oil is about 1.43 times costlier than palm oil.