Malaysian palm oil futures closed down nearly 1 percent on Friday due to a rise in production and disappointment with the government's decision to resume taxing exports of the edible oil. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,426 ringgit ($619.67) per tonne at the end of trading, snapping a four-session rise this week. Prices held relatively flat from the week before, inching up just 0.4 percent week on the week.
Trading volumes stood at 56,911 lots of 25 tonnes each. "The market is factoring in news that the government will not extend the suspension of export tax," said David Ng of Phillip Futures in Kuala Lumpur, adding that buyers could turn to neighbouring Indonesia, another top producer.
Malaysia had suspended duties on palm oil exports for three months, and this week announced it would once again impose a duty of 5 percent. "Everyone is also concerned about a rise in production. Generally, March has a longer harvesting cycle than February," he added, referring to data released this week that showed regional output for the March 1-20 period climbed 36.4 percent from a month earlier.
In other related oils, the May soyabean oil contract on the Chicago Board of Trade was down 0.78 percent. On the Dalian Commodity Exchange, the May soyabean oil contract ticked down 0.28 percent, while the May palm oil contract slid 0.86 percent.
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.
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