Palm jumps 1% on zero tax forecast, technical rebound

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KUALA LUMPUR (Aug 8): Malaysian palm oil futures rose 1% by close of trade on Wednesday, reversing losses from earlier in the day to chart a fourth straight day of gains, on expectations Malaysia's crude palm oil export duty for September could be a zero rate.  

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 1% at 2,258 ringgit (US$554.25) a tonne in the evening. The market earlier climbed to 2,265 ringgit, palm's strongest levels since July 10, helped too by a technical rebound.  

Trading volumes stood at 70,765 lots of 25 tonnes each at the end of the trading day.

"The market jumped on a technical rebound, plus traders expect that September's export duty could be zero," said a futures trader in Kuala Lumpur, referring to Malaysia's export duty on crude palm oil which was last set at a 4.5% rate in August.

Malaysia, the world's second largest palm oil producer, sets a monthly export duty for crude palm oil, but a zero rate is incurred if palm prices fall below 2,250 ringgit.

Benchmark palm prices have been trading below 2,250 ringgit in the past month. Its average price for the month of July is 2,251 ringgit, according to Eikon data.

In other related oils, the Chicago December soybean oil contract rose 0.3%, while the January soybean oil contract on China's Dalian Commodity Exchange was up 0.5%. 

Meanwhile, the Dalian January palm oil contract edged up 0.6%.

Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.
                
 Palm, soy and crude oil prices at 1135 GMT

 Contract          Month    Last   Change     Low   High  Volume
 MY PALM OIL       AUG8     2211   +25.00    2210   2249     105
 MY PALM OIL       SEP8     2239   +25.00    2200   2250    3654
 MY PALM OIL       OCT8     2257   +23.00    2219   2265   21857
 CHINA PALM OLEIN  JAN9     4928   +30.00    4906   4942  256516
 CHINA SOYOIL      JAN9     5888   +28.00    5854   5910  331110
 CBOT SOY OIL      DEC8    29.19    +0.00      29  29.21    6309
 INDIA PALM OIL    AUG8   594.80    +1.20  591.60  595.7     535
 INDIA SOYOIL      AUG8    736.2    -1.40   735.3  739.5    6760
 NYMEX CRUDE       SEP8    68.85    -0.32   68.63  69.37   96925

 Palm oil prices in Malaysian ringgit per tonne
 CBOT soy oil in U.S. cents per pound
 Dalian soy oil and RBD palm olein in Chinese yuan per tonne
 India soy oil in Indian rupee per 10 kg
 Crude in U.S. dollars per barrel
 
(US$1 = 4.0740 ringgit)
(US$1 = 68.6225 Indian rupees)
(US$1 = 6.8344 Chinese yuan)