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Palm prices rise on Dalian's stronger Dalian and Indonesia's increased levy

Palm prices rise on Dalian's stronger Dalian and Indonesia's increased levy

Malaysian palm oils continued to rise on Wednesday. This was due to the stronger edible oils on the Dalian market, and Indonesia's decision of raising its palm oil export tax.

By midday, the benchmark contract for palm oil delivery in June on the Bursa Derivatives exchange had gained 50 ringgit or 1.15% to $4,416 ringgit (US$996.84).

The futures trading resumed on a bullish tone mainly because Indonesia reaffirmed an increase in export levies for palm oil. Prices also gained strength after the bullish momentum of Dalian vegetable oils futures," Anilkumar Bagani said, head researcher at Sunvin Group.

A plantation fund official announced on Tuesday that Indonesia would increase its palm oil export tax from 3% up to 7.5% to finance an increase in the amount used to make biodiesel.

A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia had maintained its 10% April export tax on crude palm oil and increased its reference price.

Dalian's palm oil contract, which is the most active contract in Dalian, gained 0.93% while soyoil prices rose by 0.27%. Chicago Board of Trade soyoil prices were down by 0.28%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

AmSpec Agri is an independent inspection company that reports a 10.1% drop in exports from Malaysian palm oils during the period March 1-15. Intertek Testing Services says it was 7.5% lower at 420,677 tons.

Technical analyst Wang Tao stated that palm oil could test support at the current price of 4,352 Ringgit per metric tonne. A break below this level would open the door to the range between 4,262 and 4,296 Ringgit.

(source: Reuters)