Palm oil advanced for the first time in four sessions on speculation that Malaysia may boost exports this month before a tax is imposed in March, reducing near record inventories in the world’s second-largest producer.
The contract for delivery in April, the most-active by open interest, climbed as much as 1.5 percent to 2,519 ringgit ($813) a metric ton on the Malaysia Derivatives Exchange, and ended the morning session at 2,511 ringgit in Kuala Lumpur. Futures declined 3 percent last week to end at 2,483 ringgit, the lowest price at close for most active futures since Jan. 29.
The tax on crude palm oil exports will be 4.5 percent for March after shipments were allowed at zero duty in January and February, according to the Customs Department. That’s less than the 9 percent tax set for this month by Indonesia, the biggest producer and exporter. Shipments from Malaysia climbed 18 percent to 673,555 tons in the first 15 days of February from the same period a month ago, surveyor Intertek said Feb. 15.
“It’s likely that Malaysian exporters may ship out more palm oil to take advantage of the zero percent tax,” said Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore.
The rush to export more palm oil this month may help to cut stockpiles, Ivy Ng, an analyst at CIMB Group Holdings Bhd., wrote in a report today. Inventories in Malaysia slid 1.9 percent to 2.58 million tons last month from an all-time high of 2.63 million tons in December, the nation’s palm oil board said Feb. 13.
Refined palm oil for delivery in September lost 0.7 percent to 7,042 yuan ($1,128) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month dropped 0.8 percent to 8,646 yuan a ton. Financial markets in China were closed last week for the Lunar New Year festival.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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