Friday, January 18, 2013
20130118 1442 Palm Oil Related News.
VEGOILS-Palm rises, overcomes India's import duty jitters
Fri Jan 18, 2013 1:17am EST
* India's palm oil demand still strong despite import tax
* Malaysian palm oil prices must stimulate exports to cut
* Palm oil signals mixed in 2,332-2,449 ringgit range
(Updates prices, adds detail)
By Anuradha Raghu
KUALA LUMPUR, Jan 18 (Reuters) - Malaysian palm oil futures
rose on Friday on steady buying ahead of the weekend, riding out
market jitters that India's new import duties could potentially
hurt demand and leave bulging stockpiles at record highs.
India, the world's biggest buyer of vegetable oils, slapped
a 2.5 percent import duty on crude edible oils on Thursday,
triggering a fall of 2.1 percent in prices of palm oil for fear
that the taxes would take a toll on exports, which have been
sluggish in January.
But traders say India's move, aimed at trimming a hefty
import bill and protecting its domestic oilseed industry, is
smaller than expected and not drastic enough to hurt demand.
"Earlier there was talk about much higher taxes, but they
came up with this because India still needs oil," said a trader
with a foreign commodities brokerage in Kuala Lumpur.
"Today, the market is a bit oversold because there is a lot
of covering going on toward the weekend," he added.
By the midday break, the benchmark April contract
on the Bursa Malaysia Derivatives Exchange was up 1 percent at
2,405 ringgit ($798) per tonne, up from Thursday's close of
Total traded volume stood at 18,097 lots of 25 tonnes each,
higher than the usual 12,500 lots, as investors hedged positions
ahead of the weekend.
Technical analysis showed that Malaysian palm oil will
display mixed signals as long as prices remain in a range of
2,332 to 2,449 ringgit per tonne, Reuters market analyst Wang
Record high stocks in Malaysia, the world's No.2 producer,
have caused prices to tumble more than 20 percent in 2012,
widening palm oil's discount to competing soybean oil and making
it the cheapest vegetable oil in the market.
But despite Malaysia's zero-duty tax structure, which it
will retain next month, the country posted dismal export
performance in the first half of January.
"Going forward, a lot depends on the export pace and whether
prices are low enough to encourage demand," said ANZ
agricultural and commodity strategist Victor Thianpiriya in
"Prices need to find that point which encourages exports.
The market is going to do whatever it needs to stimulate enough
exports to get stocks lower," he added.
Brent crude steadied above $111 per barrel on Friday,
supported by a rebound in China's growth and encouraging data
from the United States, while a steep jump in the previous
session, triggered partly by an Algerian crisis, limited further
U.S. soyoil for March delivery was almost flat in
early Asian trade. The most active May soybean oil contract
on the Dalian Commodity Exchange rose 0.7 percent.
Posted by MW Chong at 2:44 PM