Malaysia uses a stepped structure for palm oil export tax, but the reference price set by the Malaysian Palm Oil Board for January is sufficient to trigger the highest level of tax. The current export tax is capped at 6.5%, but this will rise to 8% in January. Based on the reference price set by the Malaysian Palm Oil Board, Malaysia’s export tax works out to about $68/tonne.
The impact of this increase will be magnified by Malaysia’s decision not to extend the export tax exemption for palm oil – palm oil exports were exempted from the export tax for the second half of 2020 as a COVID-19 relief measure.
Crude palm oil futures firm at Rs 925.50 per 10 kg
In the futures market, Crude Palm Oil (CPO) for December delivery touched an intraday high of Rs 929.70 and an intraday low of Rs 917.20 per 10 kg on MCX.
Mumbai / December 17, 2020 / 03:45 PM IST
Crude palm oil futures traded firm at Rs 925.50 per 10 kg on December 17. Malaysian palm oil futures jumped 1.15 percent to settle at 3,404 Ringgits on Bursa Malaysia Bhd.
Malaysian Palm Oil Board (MPOB) reported Malaysian palm oil stock at 15.64 lakh tons, down by 0.5 percent from last month.
Kshtij Purohit, Product Manager Currency & Commodities, CapitalVia Global Research Limited said, “CPO has crossed the short-term resistance above Rs 920 and close above this level. The next resistance for the commodity is Rs 930 levels. The price is moving higher high lower low formation which suggests buy on dips for the commodity.”
WHAT IS CRUDE PALM OIL? Crude Palm Oil Palm Oil is used for cooking and largely in South East Asia. Besides cooking purposes and food products, Palm Oil and derivatives known as fractions of the oil are used in the manufacture of pre-packaged food, cosmetics, cleaning products, hair care, soaps and personal care items. Palm Wax is used in the manufacture of candles. It is also used to manufacture bio fuel for motor vehicles, shipping and aircraft fuel and one of its by-products is glycerin. Indonesia and Malaysia are the major producing and exporting nations of palm oil. 85% of the world’s crude palm oil comes from Indonesia and Malaysia. Adverse weather conditions for palm output have an effect on the prices. Wide fluctuations in the currencies of Indonesia and Malaysia also affect palm prices. During periods of dry spells or heavy rainfall resulting in flooding, palm oil production would be affected and subsequently prices
In the futures market, Crude Palm Oil (CPO) for December delivery touched an intraday high of Rs 922.10 and an intraday low of Rs 907 per 10 kg on MCX.
Crude palm oil futures surge nearly 1% in afternoon trade
In the futures market, crude palm oil for December delivery touched an intraday high of Rs 903.50 and an intraday low of Rs 892.40 per 10 kg on MCX.
CPO
Crude palm oil futures traded firm at Rs 902.80 per 10 kg on December 10 as participants increased their long position as seen by the open interest. Malaysian palm oil futures gained 1.48 percent to settle at 3,408 Ringgits on Bursa Malaysia Bhd.
The Malaysian Palm Oil Association (MPOA) expects Malaysian palm oil output to decline by 12 percent in November, while exports are expected to slump more than 15 percent during the month.