KUALA LUMPUR, Aug 23: Malaysian crude palm oil futures edged higher in light trade on Thursday, supported by Indonesia’s plans to raise an export tax on the commodity and a weakening ringgit currency against the dollar.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange settled up 5 ringgit at 2,430 ringgit per ton ($699).

The market has been slowly building since morning on the prospect that there would be a rise in export taxes but when it would take effect has been a big question, said a leading trader.

Now that it has been announced, players should be shortcovering on Friday and the market is likely to go up.

Indonesia will announce an increase in the palm oil export tax in early September in a bid to contain local cooking oil prices, Industry Minister Fahmi Idris said on Thursday, just a few minutes before the close of trade.

In mid-June, Indonesia raised the export tax on crude palm oil to 6.5 per cent from 1.5 per cent and palm oil products to 6.5 per cent from 0.3 per cent, to stabilise cooking oil prices which were up about 30 per cent at that time.

Palm oil, used in products ranging from confectionaries and cosmetics to biofuel, is around 12 per cent off an historic high of 2,764 ringgit reached in early June.

Exports of Malaysian palm oil products during Aug 1-20 rose 13.7 per cent to 732,667 tons from 644,332 tons shipped between July 1 and 20, cargo surveyor Intertek Testing Services said on Monday.

In the physical market, crude palm oil for August shipment in Malaysia’s southern region was quoted at 2,535/2,540 ringgit a ton. Deals were done between 2,530 and 2,545 ringgit.

—Reuters