Palm oil firms as Indonesia hikes maximum export tax

June 10, 2022: Malaysian palm oil futures ticked up on Friday after Indonesia raised its maximum export tax, although the market is set for its first weekly decline in three in anticipation of the world's biggest producer's return to the export market.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 31 ringgit, or 0.5%, to 6,241 ringgit ($1,419.38) a tonne during early trade.

Palm has declined 3% this week, also weighed by fresh COVID-19 curbs in parts of Shanghai. 

FUNDAMENTALS

* Indonesia Finance Ministry raised its maximum export tax for crude palm oil to $288 per tonne when the government's reference price is set above $1,500 per tonne, a regulation document reviewed by Reuters showed.

* China's commercial hub of Shanghai faces an unexpected round of mass COVID-19 testing for most residents this weekend - just 10 days after a city-wide lockdown was lifted - unsettling residents and raising concerns about the impact on business.

* Dalian's most-active soyoil contract DBYcv1 fell 1%, while its palm oil contract DCPcv1 dropped 2.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.6%.

* The Malaysian Palm Oil Board and cargo surveyors are scheduled to release key supply and demand data later in the day.

* Palm oil may rise towards 6,423 ringgit per tonne, as it has found support around 6,138 ringgit and climbed above resistance at 6,233 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian shares tracked Wall Street lower, while the dollar held on to its overnight gains after rate hike guidance from the European Central Bank and upcoming U.S. inflation data unnerved investors.

Reuters