Malaysian palm oil futures retreated from a more than six-month high hit the previous session on Tuesday, tracking weaker related oils on the US Chicago Board of Trade and China's Dalian Commodity Exchange. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 1.3% at 2,239 ringgit ($534.37) per tonne, snapping five days of gains. Earlier in the session, it had fallen as much as 1.9% to a three-day low of 2,227 ringgit.
The contract hit its strongest level since Feb. 8 on Monday at 2,312 ringgit. Reuters technical analyst for commodities and energy, Wang Tao, said a break of support at 2,243 ringgit could open the way for a move to 2,181 ringgit. "The current weakness in competing vegetable oils are dragging on prices," said a Kuala Lumpur-based trader. US soyaoil futures on the Chicago Board of Trade were last down 0.7% and the September soyaoil contract on the Dalian exchange declined 2.1%.
The Dalian September palm oil contract also fell 2.9%. India's trade ministry on Monday recommended raising the tax on refined palm oil imports from Malaysia to 50% from 45% to curb cheaper purchases of the commodity, a government document said. India, the world's biggest edible oil importer, currently imposes a 40% import tax on crude palm oil and 50% on refined palm oils. But refined palm oil shipments from Malaysia have been taxed at 45% since January, under an agreement between the two countries. The change in duty structure led to a jump in Malaysia's refined palm oil exports to India in the first half of 2019 from the same period a year earlier, according to data from the Malaysian Palm Oil Board.