Palm jumps 3% on boost to Chinese import margins from recent weak prices
- Top producer Indonesia on Monday announced that it would change the levy structure for palm oil exports
KUALA LUMPUR: Malaysian palm oil futures leaped 3% on Tuesday as a decline in prices this month lifted Chinese import margins, but Indonesia's plan to revise its palm oil export levy capped gains.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 99 ringgit, or 2.92%, to a near one-week high of 3,490 ringgit ($841.57) a tonne by the midday break.
"Palm oil prices rose in line with much improved Chinese import margins for Q4 2021 and Q1 2022 following the recent reversal, as well on expectations for much improved demand over the third quarter this year," said Marcello Cultrera, institutional sales manager & broker at Phillip Futures in Kuala Lumpur.
The contract has declined nearly 11% so far this month.
Exports of Malaysian palm oil products for June 1-20 rose 11.2% to 962,184 tonnes from the same period last month, cargo surveyor Societe Generale de Surveillance said on Monday.
Top producer Indonesia on Monday announced that it would change the levy structure for palm oil exports, cutting the ceiling rate for crude palm oil levies to $175 per tonne from $255.
The move is expected to improve profit margin for exporters, Indonesia Palm Oil Association (GAPKI) said, although other groups felt the frequent changes in rules were hurting demand.
Dalian's most-active soyoil contract rose 2%, while its palm oil contract gained 1.3%. Soyoil prices on the Chicago Board of Trade were down 0.22%, after rising over 3% in the previous session.
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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