KUALA LUMPUR: Malaysian palm oil futures fell on Monday, extending last week’s losses on news of Indonesia’s plan to change its export levy.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed lower by 32 ringgit, or 0.93%, to 3,392 ringgit ($818.34) a tonne.
Palm declined 6.5% last week, weighed by India’s move to put on hold a proposal to reduce import taxes on edible oils.
Top producer Indonesia will change its palm oil export levy scheme to reduce the highest rate to $175 per tonne soon, Finance Minister Sri Mulyani Indrawati said, compared with $255 per tonne under the current rules.
Indonesia’s authorities have been mulling for months on whether to cut their crude palm oil (CPO) export levy, which has remained at its highest for five months in a row, hurting demand.
“The reduction in Indonesia’s palm oil export levies would be seen pressuring Malaysian palm oil prices as it would increase the competition to grab the export market share,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Malaysia, the world’s second-largest producer, last week maintained its July export tax for crude palm oil at 8%.
Exports from Malaysia during June 1-20 fell 1.8% to 937,135 tonnes from the same period in May, independent inspection company AmSpec Agri Malaysia said.
Intertek Testing Services on Sunday said exports during the period declined 0.8%.
Dalian’s most-active soyaoil contract gained 1.2% and its palm oil contract rose 1%. Soyaoil prices on the Chicago Board of Trade were down 1.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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