KUALA LUMPUR, July 22: Malaysia crude palm oil futures ended higher on Tuesday on late profit-taking spurred by talk, later confirmed, that Indonesia would cut export taxes for palm oil products, dealers said.

Palm oil — used in products from soaps to biofuel – is hovering about 27 per cent below a record high hit in early March of 4,486 ringgit a ton on account of record inventory levels.

By the close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange was 8 ringgit down 3,252 ringgit ($1,005) a ton. It stood 18 ringgit higher at midday.

The market closed off highs as profit-taking emerged after it was confirmed that Indonesia would cut export taxes for palm oil products, a trader said. Traders were waiting for more leads from the overseas markets. Other traded months were down as much as 13 ringgit or up 14 ringgit. Overall traded volumes stood at 12,575 lots of 25 tons.

Indonesia said on Tuesday it has cut export taxes for palm oil products in August to bring them in line with international prices, the trade ministry said on Tuesday.

The export tax for crude palm oil in August will be cut to 15 per cent from 20 per cent in July, while the base export price for crude palm oil will be cut 3.3 per cent to $1,106 a ton from $1,144 a ton.

The base price and export tax will be valid from August 1 to the end of the month. The base export price is used to calculate the export tax paid by exporters.

One analyst said the market could trend up slightly on declining producer stocks. Palm oil prices would average at 3,500 ringgit this year, Ratnam said.

Buyers in China, India and Middle East nations tend to stock up at least two months before the Asian festival season begins in early September with the Muslim fasting month of Ramazan.

Cargo surveyor Intertek Testing Services reported exports of Malaysian palm oil products for July 1-20 rose 11.3 per cent to 834,317 tons from previous month.

Societe Generale de Surveillance reported a slight increase of 5.3 per cent to 794,768 tons.—Reuters