Soyoil futures garnered pressure from weakness in soybeans and spillover pressure from crude oil. Crude oil influences soyoil due to its use in making renewable fuels. July soyoil settled 0.34 cent, or 0.9%, lower at 37.59 cents per pound. Speculative funds were estimated sellers of 3,000 lots in soyoil. July soymeal ended $1.40, or 0.5%, lower at $289.30 per short ton. Speculative funds were estimated sellers of 1,000 lots in soymeal.(Source: CME)
Indonesia To Maintain CPO Export Tax At 4.5% In July
Indonesia will maintain its export tax on crude palm oil at 4.5% in July, the Ministry of Trade said Wednesday. The base price for CPO in July has been lowered to $732 a metric ton from $754/ton in June, it said.(Source: CME)
Asian CPO Output To Rise In 2H, Bearish For Prices-Analyst
Crude palm oil production in Indonesia and Malaysia may rise further in the second half of the year, pushing inventory to a level where it could start weighing on prices, a Netherlands-based analyst at Rabobank International said in an interview.
"Prices are definitely vulnerable to further declines given high volatility in the market now. The global economic (outlook is still) uncertain. On the production front, yields will increase in the second half of the year... depressing prices," said Chan Wei Siang, analyst at Rabobank International's Food & Agribusiness Research and Advisory.
Malaysia and Indonesia together account for 80% of the palm oil produced globally. Southeast Asia's total palm oil stocks are likely to be around 3.6 million tons now as output in June would have risen significantly, traders in Malaysia and Indonesia estimated. Unofficial projections put current Indonesian stocks around 2 million tons. Malaysia's official June estimates will be released in the second week of July.
According to market participants, output in Malaysia would have risen some 15% in June while in Indonesia the gain was as much as 20% on month. But it may not all be bad news for producers. "Though output will increase in the second half, (overall) growth in CPO output will likely be muted in 2010 due to the residual effect of El-Nino," Chan said. Even though the El-Nino has officially ended, its impact can last six to ten months as oil palm trees continue to remain under stress caused by dry weather during the El-Nino months.
Total CPO production in 2010 may rise by only 3% or 500,000 tons to 18.1 million tons in Malaysia, while Indonesia's output could rise by 7% or 1.5 million tons to 22.4 million tons, he said.
The record high South American soybean harvest this year has already reduced soyoil prices, narrowing the price gap with the lower-priced palm oil. In some cases, palm oil is even trading at a slight premium to soyoil.
"The narrow price differential has made soyoil very competitive (in international markets) with more buyers making the switch from palm," Chan said.
Palm oil traditionally trades at a discount of more than $100/ton to soyoil, but that has narrowed to the point where palm olein now trades in a range that is just $20 above or below soyoil.(Source: CME)
Degraded land rules key to Indonesia climate goal
SINGAPORE, June 23 (Reuters) - Indonesia needs to quickly settle rules for deciding what is degraded land and spell out how much is available to palm oil and timber firms in order to strengthen investment certainty, an environmental expert says.
Such a move would also boost a $1-billion climate deal signed last month by Indonesia and Norway.
Indonesia lowers July CPO, cocoa base export prices
JAKARTA, June 23 (Reuters) - Indonesia will keep its July export taxes for crude palm oil and cocoa beans unchanged from June levels, but will lower base export prices, the trade ministry said on Wednesday.
The crude palm oil export tax will stay at 4.5 percent in July while the cocoa export tax will remain at 10 percent, the ministry said in a statement.
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