FCPO Related News ( Mon, Jan 21)

Malaysia Jan 1-20 Palm Oil Exports is 830,830 Tons, Down 17% [Intertek]

Crude palm-oil futures on Malaysia’s derivatives exchange ended higher Friday as investors covered short positions ahead of the weekend. However, palm oil’s upside remains limited as a result of persistent concerns about ample palm-oil supplies in Malaysia owing to export worries following an Indian import tax on crude edible oils, market participants said. The benchmark April contract at Bursa Malaysia Derivatives ended 0.9% higher at 2,400 ringgit a metric ton after moving in a MYR2,377-MYR2,418 range.

India, the world’s biggest vegetable-oil buyer, imposed a 2.5% import duty on crude edible oils Thursday to thwart an influx of cheap imports and protect domestic oilseed farmers. "India’s import-tax rate on crude edible oils wasn’t as drastic as previously feared. Given that India is a very price-sensitive market I doubt the consumption pattern of the country’s consumers will change much seeing as palm oil is still the cheapest cooking oil compared to other vegetable oils," a vegetable-oil exporter in Kuala Lumpur said. "India will continue to buy CPO." At current prices refined palm products are offered $350-$370/ton cheaper than rival soy oil and a hefty $400/ton discount to rapeseed oil.

Palm-oil prices face limited upside in the week ahead pressured by record high palm-oil stockpiles in Malaysia–the world’s No. 2 producer–in spite of setting no tax on crude palm oil exports for January. "Prices will have to ease further toward MYR2,250/ton to stimulate more demand," an analyst at a Kuala Lumpur-based bank said. In October, Malaysia said it will reduce export taxes for the crude grade from 23% to a graduated basis ranging from 4.5% to 8.5%, increasing as palm prices rise from MYR2,250/ton, in a bid to regain market share lost to Indonesia and to help flesh out excess stocks. There is no tax now because the reference palm-oil price is below MYR2,250/ton.           [Dow Jones Newswire]

Today’s Support and Resistance for benchmark April contract is located around 2,378 and 2,425 respectively.