Malaysian palm oil futures climbed on Tuesday to their highest closing in 11 days, after larger producer Indonesia lowered its export tax threshold on crude palm oil, bridging the discount gap against Malaysian palm oil.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 54 ringgit, or 1.33%, to 4,125 ringgit ($926.34) a tonne, up for a third consecutive session.
Indonesia lowered its threshold for applying export tax on crude palm oil to a reference price of $680 per tonne, down from $750 per tonne previously, according to a finance ministry regulation.
Indonesia’s customs office said the changes raised the current export tax for crude palm oil to $52 per tonne from the previous $33 per tonne, with the reference price currently set at $872.27 per tonne.
Exports from Indonesia is expected to “surge remarkably” this month due to the long wait at ports for vessels to start shipping, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
In related oils, two more grain-carrying ships sailed from Ukraine’s Chornomorsk port, Turkey’s defence ministry said, as part of a deal to unblock Ukrainian sea exports amid the conflict with Russia.
This has raised hopes for the return of sunflower oil, but prices are also seen rising as demand returns, Bagani said.
Dalian’s most-active soyoil contract DBYcv1 and its palm oil contract DCPcv1 both gained 2.1%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
