Bursa Malaysia crude palm oil futures set to tread water ahead of export duty cut

An aerial view of Singapore’s portAn aerial view of Singapore’s port

Crude palm oil futures on the Bursa Malaysia Derivatives exchange are expected to tread water on Thursday, ahead of an export duty cut next month, as the market digests weak shipments so far in August.

Bursa Malaysia front-month palm oil futures fell 0.8 percent to 2,195 ringgit ($535.10) a metric ton, marking an intraday low of 2,192 ringgit. Turnover reached 47,322 lots on Wednesday, a gain on 43,246 lots on Tuesday and open interest decreased to 288,047 contracts from 290,567 contracts.

Malaysian palm oil exports slipped 14.6 percent to 415,719 metric tons from August 1 to 15, according to AmSpec Agri Malaysia, comparing the data to the same period a month earlier. Traders said sellers and buyers are delaying deals until a cut in the export tax to zero from 4.5 percent starts in September. Cargo surveyor Societe Generale de Surveillance reported a 11.1 percent decline in Malaysian exports for the same period.

Demand from India is also in focus as the rupee fell, with the U.S. dollar fetching more than 70 rupees this week, making imported vegetable oils priced in dollars more expensive for the world’s top buyer of edible oils. Markets in India were shut on Wednesday to mark independence day.

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