Export Tax, Vegoils to Support

 Crude Palm Oil Ends Lower; Export Tax, Vegoils to Support
Crude palm oil futures on Malaysia’s derivatives exchange ended lower Tuesday as weak export data and uncertainty over the U.S. fiscal cliff weighed on market sentiment.
The benchmark March contract at Bursa Malaysia Derivatives ended 0.3% lower at 2,342 ringgit a metric ton after trading in a tight MYR2,332-MYR2,355/ton range.

Cargo surveyor SGS (Malaysia) Bhd. on Monday put Dec. 1-15 palm oil exports at 734,571 tons, a decline of 3.3% from the same period a month earlier.

Sentiment also remained cautious as investors focused on the impending U.S. fiscal cliff as the country's Republicans and Democrats continue to negotiate on the nature of spending cuts and tax hikes expected to take effect in January.

However, the losses were tempered by Malaysia's new CPO export tax structure, market participants said.
Malaysia on Monday set its export tax on crude palm oil for January at zero percent for CPO market prices of less than MYR2,250/ton, free on board.

The move will help boost shipments from the world's second-largest palm oil producer, reducing palm oil inventories, a Kuala Lumpur-based trader said.
December palm oil inventories will likely be steady to slightly lower than the record 2.56 million tons seen at the end of November as demand from China picks up, he said.

Palm oil prices will also likely be supported by fears of tightening vegetable oil markets, another Kuala Lumpur-based trader said.
Recent rainfall in Argentina, the world's third-largest soybean producer after the U.S. and Brazil, could further slow down crop plantings in some parts, he said, tipping soyoil on the Chicago Board of Trade to edge higher toward the 51.30-cents-a-pound mark in the coming sessions.

Investors are also awaiting an announcement by Indonesia in the coming days on its CPO export tax structure for January.
In the cash market, refined palm olein for January was offered at $770/ton, while cash CPO was offered at MYR2,150/ton.
Open interest on the BMD was 183,945 lots versus 186,314 lots Monday. One lot is equivalent to 25 tons.
A total of 30,911 lots of CPO were traded versus 30,886 lots Monday.

 
Ending BMD Crude Palm Oil (CPO) futures prices in MYR/ton: 
 
Month   Close  Previous  Change   High    Low 
Jan'13  2,197     2,197     00   2,200  2,188 
Feb'13  2,277     2,280    -03   2,293  2,267 
Mar'13  2,342     2,350    -08   2,355  2,332 
Apr'13  2,400     2,410    -10   2,414  2,394 
 

Write to Surabhi Sahu at surabhi.sahu@dowjones.com
(END) Dow Jones Newswires
December 18, 2012 06:25 ET (11:25 GMT)
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