Malaysian palm oil futures surged over 1 percent in evening trade on Friday following Malaysia's announcement that it would extend tax exemptions on crude palm oil (CPO) exports to a fourth straight month in April. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 1.3 percent at 2,505 ringgit ($647.62) a tonne by the end of the trading day.
Palm earlier rose to 2,510 ringgit a tonne, its highest since March 2. It has gained 3.2 percent this week, its strongest weekly gain so far this year. Trading volumes stood at 58,732 lots of 25 tonnes each on Friday evening.
"The market ran up in the evening on the news," said a Kuala Lumpur-based futures trader, referring to Malaysia's move to extend its CPO export tax suspension. "There is also some weekend covering and technical buying."
Malaysia had first suspended export taxes at the start of the year for three months to support CPO prices by boosting demand and reducing stockpiles. It was expected to have ended on Saturday and the Malaysian government said last month that it was setting its April CPO export tax at 5 percent. Malaysia then said on Friday it would extend its CPO export tax suspension until the end of April or if palm oil end-stocks fell to 1.6 million tonnes.
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