KUALA LUMPUR: Malaysian palm oil futures fell nearly 3% on Thursday, paring most gains from the previous session, as traders booked profits after prices hit an all-time high.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed 144 ringgit, or 2.87%, lower at 4,877 ringgit ($1,174.47) a tonne, with weaker rival oils in Dalian also denting sentiment.
Palm had crossed the 5,000 ringgit per tonne mark in the previous session, after top buyer India slashed import taxes on crude and refined varieties of palm oil, soyoil and sunflower oil ahead of key festivals to cool near-record price rises.
“The revised import duties put crude palm oil (CPO) at a disadvantage against sunflower oil and soybean oil as the import duty on CPO of 8.25% is higher than crude soybean oil and crude sunflower oil of 5.5%,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, wrote in a note.
Palm rebounds on stronger US soyoil, tight supply view
“Exporters are already seeing the effect of high palm oil prices on demand as customers are relunctant to buy at these prices,” said Mohsin Mohammad, director at Selangor-based cooking oil exporter Sarafiah Natural Resources.
Malaysia has maintained its November export tax for crude palm oil at 8% but increased the reference price.
The world’s biggest palm oil exporter, Indonesia, aims to stop exporting the crude form of the vegetable oil in the future in favour of refined products, President Joko Widodo said on Wednesday.
Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract eased 0.8%. Soyoil prices on the Chicago Board of Trade were up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.