Palm falls from high as India import tax hits sentiment

KUALA LUMPUR: Palm oil futures fell in early trade yesterday and were set for their first fall in five sessions as sentiment took a hit after India on Friday said it would raise import taxes on crude and refined edible oils.
India, the world’s largest buyer of vegetable oils, doubled the import tax on crude palm oils to 15% and raised the import tax on refined palm oils to 25% to protect local oilseed farmers from cheaper imports from top suppliers Malaysia and Indonesia.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.2% at RM2,677 ) at the midday break. Traded volumes stood at 10,614 lots of 25 tonnes each at noon.
“The market may trade cautiously after the import duty hike in India,” said a futures trader, adding that Indian demand for palm oil could decline in the coming weeks. Cargo surveyor data showing Malaysia’s palm oil exports for the first half of August is scheduled for release today.
Another trader said that while India’s announcement partly weighed down palm, prices were also tracking weaker performing soyoil on the Chicago Board of Trade and China’s Dalian Commodity Exchange.
Palm oil prices are impacted by the movements in related edible oils including soy, as they compete for a share in the global vegetable oils market.
The October soybean oil contract on the Chicago Board of Trade was slightly down 0.1%, while the January soybean oil on the Dalian Commodity Exchange fell 0.2%. In other related oils, the January palm olein contract was up 0.5%. – Reuters