Palm slips as China tariffs are cut and Indonesia B50 is cancelled
Malaysian palm futures fell on Monday as China cut import tariffs on Canadian Canola, and Indonesia canceled plans for its B50 Biodiesel mandate, but the festival demand provided some support.
By midday, the benchmark contract for April palm oil on Bursa Derivatives Exchange fell 15 ringgit or 0.37% to 4,057 Ringgit ($1,000.99). The contract increased by 2.31% on the Friday.
Anilkumar Bagani of Sunvin Group in Mumbai, the head of commodity research, explained that the market fell due to China's reduction of its import tariffs for Canadian Canola to a combined rate 15%, down from 84%. It also reflected a decrease in demand for palm oil biofuels following Indonesian announcements not to implement their mandatory?B50-grade of palm oil-based Diesel this year.
Bagani stated that the palm oil discount against soyoil and sunflower oil is continuing to attract buyers.
The upcoming holiday season of Chinese New Year, Ramadan, and the low production season will also continue to support price.
On Tuesday, cargo surveyors will release their export estimates for the period January 1-20.
Dalian's soyoil contract was the most active, rising 0.45%. Palm oil contracts rose 0.3%. The Chicago Board of Trade closed its Soyoil market for the public holiday.
Palm oil monitors the price changes of competing edible oils in its competition for a share of global vegetable oils.
After a Friday?rising, oil prices remained unchanged as Iran's violent crackdown on anti-government protests subdued unrest, reducing the likelihood of an?U.S. attack. Attack on major Middle Eastern producers that could disrupt supplies.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency, the?trade currency, has firmed by 0.05% against dollars, making it slightly more expensive for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil is neutral between 4,051-4,088 Ringgit per metric tonne, and a breakout could indicate a direction.
(source: Reuters)
