Crude palm oil futures on the Bursa Malaysia Derivatives exchange are expected to hold in a tight range this week ahead of an export duty cut to zero, effective September 1, from 4.5 percent currently.
Bursa Malaysia front-month palm oil futures for November settled up 0.7 percent at 2,238 ringgit ($545.19) a metric ton on volumes of 37,337 lots of 25 metric tons each.
Ahead this week, a technical range of 2,150 ringgit to 2,220 ringgit a metric ton is seen with some focus on Malaysian Prime Minister Mohammed Mahathir’s visit to China winding up on Tuesday with expected agreements on higher palm oil and rubber exports to China.
Trade talks between the U.S. and China this month are being closely watched in the edible oils market to see if there is any movement on China’s higher tariffs on imports of soybeans from the U.S.
As well, a report by Reuters on Friday said India’s palm oil imports are expected to fall further on a combination of a weaker rupee, tighter trade credit and a higher import tax on refined palm oil to 54 percent set in March to support local farmers. India is the world’s top edible oil importer.
“Local prices moved up due to higher import tax and depreciation in the rupee. The price rise moderated demand for imports,” B.V. Mehta, executive director of the Solvent Extractors Association (SEA) of India told Reuters.
India’s palm oil imports fell 9.5 percent to 6.1 million metric tons in the marketing year started November 2017, SEA data shows, with a forecast of 1.8 million metric tons for August to October, compared with 2.55 million metric tons in the same period a year earlier. That would bring total 2017/18 palm imports to 7.9 million metric tons.