VEGOILS - Palm flat due to China canola tariff reduction, Indonesia B50 cancellation weighing

Malaysian palm futures were not much changed on Monday as China's plans for a reduction in import?tariffs of Canadian canola, and Indonesia's decision to cancel its B50 'biodiesel' mandate, weighed on market. However, upcoming festival demand lent some support.

At the close, the benchmark April palm oil contract on Bursa Malaysia's Derivatives exchange fell 3 ringgit or 0.07% to 4,069 Ringgit ($1,004.20), a metric tonne. The contract increased by 2.31% on Saturday.

Anilkumar bagani, the head of commodity analysis at Sunvin Group in Mumbai, explained that the market fell due to China reducing its tariffs on Canadian Canola from 84% to 15%.

Bagani said that the adjustment in demand for palm oil biofuels following Indonesia's announcement to not implement its mandatory B50 grade palm oil-based Diesel this year also weighed.

He said that prices continue to be supported by the palm oil discount compared to soyoil, sunflower oil, and other oils.

The upcoming holiday season of Chinese New Year, Ramadan, and the low production seasons will also continue to support price.

Tuesday, cargo surveyors will release their export estimates for the period January 1-20.

Dalian's soyoil contract was the most active, rising 0.23%. Palm oil contracts rose 0.35%. The Chicago Board of Trade closed its Soyoil market for a holiday.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price movement of competing?edible oils.

As civil unrest in Iran has?subsided and the likelihood of an attack by the United States to disrupt Middle Eastern oil production has decreased, the price of oil fell 1%.

Palm oil is more appealing as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency firmed by 0.07% against US dollars, making it slightly more expensive for buyers who hold foreign currencies. ($1 = 4.0520 ringgit)

(source: Reuters)