Mumbai, 17 Sep (Commoditiescontrol): Malaysian crude palm oil (CPO) futures declined on Tuesday after reopening from a holiday, pressured by India's decision to increase import taxes on edible oils, which dampened market sentiment.
The benchmark CPO contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 59 ringgit, or 1.56%, to 3,716 ringgit ($869.24) per metric ton. This follows a 2.2% loss in the previous week.
India, the world’s largest importer of edible oils, imposed a 20% basic customs duty on crude palm oil, crude soyoil, and crude sunflower oil, effective from September 14. This decision raised the total import duty on these oils to 27.5%, up from 5.5%, factoring in the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge, adding pressure to global edible oil markets.
Meanwhile, crude oil prices extended their gains amid concerns over U.S. output following Hurricane Francine and expectations of lower U.S. crude inventories. Rising oil prices make palm oil a more attractive option for biodiesel production, providing some support to the CPO market. Soyoil prices on the Chicago Board of Trade edged up 0.15%.
China’s Dalian Commodity Exchange remained closed for a holiday, limiting market activity. Palm oil, which often tracks the price movements of rival edible oils, competes for a share of the global vegetable oils market.
Additionally, the strengthening of the ringgit, palm oil’s currency of trade, by 0.47% against the U.S. dollar has made the commodity more expensive for foreign buyers, adding downward pressure on prices.
Technically, palm oil prices may test a support zone between 3,782 ringgit and 3,796 ringgit per metric ton. A break below this range could trigger a further decline to 3,759 ringgit, according to market analysts.
(By Commoditiescontrol Bureau: 09820130172)
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