Palm Oil Drops From Two-Week High as Indonesia Lowers Export TaxRanjeetha Pakiam
Palm oil fell for the first time in four days on concern that a cut in Indonesian export tax may reduce demand for supplies from Malaysia.
The contract for April delivery declined as much as 0.9 percent to 2,556 ringgit ($769) a metric ton on the Bursa Malaysia Derivatives and was at 2,573 ringgit at 4:46 p.m. in Kuala Lumpur. Futures closed at 2,579 ringgit yesterday, capping a 3.5 percent gain in three sessions to the highest level for most-active futures since Jan. 6.
Indonesia, the world’s biggest producer, cut the tax on crude palm oil exports to 10.5 percent for February from 12 percent, according to Faiz Achmad, director of food at the Industry Ministry. Malaysia will retain the tariff at 5 percent for next month, the government said on Jan. 15.
The narrowing tax differential may intensify competition between supplies from the world’s two-biggest producers, said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. “After it rebounded from the low by about 100 ringgit, it’s time for some profit-taking.”
Soybean oil for March delivery advanced 1.3 percent to 38.22 cents a pound on the Chicago Board of Trade, while soybeans retreated 0.4 percent to $13.1075 a bushel.
Refined palm oil for May delivery fell 0.6 percent to close at 5,888 yuan ($973) a ton on the Dalian Commodity Exchange. Soybean oil declined 0.5 percent to end at 6,666 yuan.