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palm oil climb high today as supported Indonesia raise its export tax reference price

KUALA LUMPUR: Malaysian palm oil futures climbed on Friday, supported by a surge in early November exports and Indonesia plan to raise its export tax reference price, even as the contract fell for the week.

After declining for three straight sessions, the benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 112 ringgit, or 2.68%, to 4,290 ringgit ($927.57) a tonne.

For the week, palm slipped by 1.76%.

In top palm oil producer Indonesia , Trade Ministry official Farid Amir said Jakarta plans to set the reference price of its crude palm oil higher at $826.58 per tonne for Nov. 16-30 shipments.

“Higher Indonesian tax and levy is set to diminish Indonesia’s price discount. This will help Malaysian prices to rise,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Nine Indonesian companies on Friday signed contracts to sell 2.5 million tonnes of palm oil products valued at $2.6 billion to 13 Chinese buyers, the Indonesian trade ministry said.

Palm has also made a stunning recovery and recouped some losses from the last three days, helped by bullish equities market, Varqa added.

Palm slumps about 4% on higher Malaysia stocks, China demand worries

Exports of palm oil products from Malaysia during Nov. 1-15 jumped between 12.7% and 33.0% from the same week in October, as shipments to India and China accelerated, cargo surveyors said on Thursday.

End-October palm oil stocks at the world’s second largest producer rose for a fifth month to a three-year high of 2.4 million tonnes, Malaysian Palm Oil Board data showed on Friday.

Dalian’s most active soyoil contract rose 1%, while its palm oil contract gained 3.6%. Soyoil prices on the Chicago Board of Trade were up 1.7%.

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