Palm Oil Continuously Gaining Toward High High


KUALA LUMPUR: Malaysian palm oil futures rebounded on Wednesday, recovering from a sell-off in the previous session, as investors assess the impact of Indonesia’s export ban on refined palm olein.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 182 ringgit, or 2.92%, at 6,411 ringgit ($1,472.61) a tonne.

The contract fell 2% on Monday after Indonesia said its export ban, set to commence on Thursday, would exclude crude palm oil.

But the world’s largest producer is prepared to widen the export ban, which currently only applies to refined palm olein, if local shortages of derivative products used in cooking oil occur, according to details of an official meeting with companies.

“Given Indonesia’s reliance on palm oil exports, a prolonged ban could seriously damage Indonesia’s economy. Thus, we doubt that the halt of exports will last for too long,” brokerage TA Securities said in a note.

Indonesia’s ban is unlikely to last more than a month as Jakarta has limited infrastructure to store the surplus oil and the country faces mounting pressure from buyers to resume shipments, industry officials said.

As a response to the ban, Bangladesh will cut import taxes on canola, sunflower and olive oil to 10% from 32% as it desperately tries to augment supplies, a senior commerce ministry official said.

Palm oil imports in the world’s biggest buyer India in May are set to rise above 600,000 tonnes despite the restriction imposed by Indonesia, as most of the contracted quantity will be loaded before the ban becomes effective, traders said.

In related oils, Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract rose 0.3%. Soyoil prices on the Chicago Board of Trade were up 0.8%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

About Haroon Khawaja

Haroon Khawaja Is a Journalist & CEO Of B-Trams , Ex Reporter At Geo News

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