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KUALA LUMPUR, Feb 26: Malaysia’s crude palm oil futures ended mixed on Tuesday with players waiting for India’s federal budget due this week.
Some traders speculated that India is likely to retain palm oil import duties unchanged in the budget, due to be presented to parliament on Thursday, but may introduce local excise duties for soy oil to protect domestic farmers.
“Nothing happened in the market. Everyone is waiting for India to say whatever it wants to say about the duties,” said one trader.
At the close, the new benchmark third-month May futures were two ringgit higher at 1,177 ringgit a ton after trading as high as 1,183 ringgit.
Volume was heavy at 2,182 lots.
Some traders said the market’s tone was firm because of prospects of fresh purchases by China, which with India is one of Malaysia’s main palm oil buyers.
“I think sentiment is firm because of the China factor and prospects of declines in output in the coming months. The market should touch 1,188 ringgit again,” said one trader.
May contract touched a high of 1,188 ringgit on Monday.
On February 8, China released the long-awaited palm oil import quotas for this year which totalled 2.4 million tons, up from last year’s 1.4 million tons.
Trade sources said China is likely to issue licences for importers to buy palm oil in the first week of March, adding that cargoes from Malaysia and Indonesia are already waiting in Hong Kong and Tianjin in China.
Separately, India on Tuesday estimated its oilseed production in 2001/02 (November-October) at 21.1 million tons up from 18.4 million tons a year ago following good monsoon rains.
In physical palm oil, the March contract for the southern regions saw bids at 1,140 ringgit a ton versus offers at 1,150. Trade was reported at 1,145 to 1,150 ringgit.
The March contract for central saw bids at 1,140 ringgit a ton against offers at 1,145. There were deals at 1,145.
The April contract for the southern and central regions was offered at 1,170 ringgit against bids of 1,160 ringgit. No deals were reported.—Reuters
