Breaking News : Likes our Facebook page and join us as members, you will receive email updates and instant updates in Telegram group.
CLICKS HERE FOR INFO TO JOIN AS X-PREMIUM MEMBER
Malaysian palm oil futures rose on Wednesday, rebounding from near one-week lows hit in the previous session, as data showing a rise in palm oil exports in early December helped reinforce some optimism about the outlook for demand. But weak Brent crude kept palm oil gains in check, as low crude prices raised concerns that buyers could shift fuel demand away from palm. Brent crude futures fell below $66 a barrel, prompted by a glut of oil in the market. Steep losses in global crude oil markets and falling soy oil prices have stoked worries that buyers could shift food and fuel demand away from palm, although the weaker ringgit has provided some cushion. Exports of Malaysian palm oil products for December 1-10 rose 1.7 percent to 407,425 tonnes from 400,614 tonnes shipped during November 1-10, cargo surveyor Intertek Testing Services said on Wednesday.
Indonesia and Malaysia, the world's top palm growers, will probably keep shipments of crude palm oil duty-free in January as prices struggle to pull away from five-year lows, and some players expect that to continue through the first quarter of 2015. Palm oil exports from Malaysia, which waived a levy on shipments for the final four months of 2014, will probably remain duty-free in January as average prices stay below a threshold for a tax to be imposed.
International prices for crude palm oil have been sluggish, hovering near five-year lows amid the weak global economy (particularly slowing growth in the world’s two largest CPO importing countries, India and China, provides downward pressures on prices). Moreover, sharply falling oil prices in recent months imply that there demand for palm oil-based biofuels reduces. Palm oil futures in Kuala Lumpur traded at 2,174 ringgit (USD $625) per metric ton on Wednesday (10/12), having improved slightly from the recent low of 1,914 ringgit (USD $572) per ton in early September after global CPO demand rose due to the zero percent CPO export tariffs in Malaysia and Indonesia. However, stakeholders and analysts in the palm oil industry estimate that CPO prices will remain sluggish throughout the first quarter of 2015.
While demand from China and Europe usually slows during the winter, duty-free exports and the weaker ringgit may boost shipments from Malaysia to countries like India and Bangladesh, Ng said. The tropical oil clouds in cooler temperatures.
Malaysia removed the duty for September and October and extended the waiver for two months to try to curb the buildup of reserves and support prices of its most valuable farm-commodity export. While the move helped spur a bull market, futures still lost 19 percent this year as demand for the tropical oil used in food and biofuels fell amid a global glut and a slump in crude prices. Data today showed Malaysian reserves climbed to the highest level since February 2013. Any extension of Malaysia’s tax exemption will help make the country’s palm oil competitive against Indonesia’s as well as against other edible oils, according to Franki Anthony Dass, executive vice president of the plantation division at Sime Darby Bhd., the biggest listed producer. It would help to ease Malaysian stockpiles, Dass said in a text message on Dec. 8.
Cheaper crude prices dent appetite for palm oil as a "green" additive for discretionary blending of biofuels. Market players are optimistic that the tax exemption could spur demand in palm's biggest consumers, including China, which will be stocking up on the tropical oil ahead of Lunar New Year festivities in February.
“If the government wants to help to bring down the stocks and also try to create some kind of buying market for the consumer to import, I hope that it can maintain the tax at zero for February and March as well,” Donny Khor, deputy director of futures and options at RHB Investment Bank Bhd., said by phone on Dec. 8.
No comments:
Post a Comment