Palm slips for fifth day as Indonesia lowers maximum export levy

June 14, 2022: Malaysian palm oil futures fell for a fifth straight session on Tuesday, hovering near a 10-week closing low hit in the previous session, as top producer Indonesia lowered its maximum export levy rate to boost exports.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 17 ringgit, or 0.29%, to 5,776 ringgit ($1,306.20) a tonne in early trade.

FUNDAMENTALS

* Indonesia issued regulations backing recently announced changes on a palm oil export tax policy, including lowering the maximum levy rate to $200 a tonne from $375 and charging special rates for its export acceleration programme.

* Indonesia's export allocation for palm oil products that is tied to domestic cooking oil distribution has been raised to 2.25 million tonnes, senior trade ministry official Oke Nurwan said on Monday, from around 1 million previously.

* Dalian's most-active soyoil contract rose 0.2%, while its palm oil contract gained 0.1%. Soyoil prices on the Chicago Board of Trade were up 0.2%, after falling 0.9% overnight.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Palm oil looks neutral in a range of 5,702-5,892 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian shares tumbled after Wall Street officially entered the bear market territory and bond yields hit a two-decade high on fears aggressive U.S. interest rate hikes would push the world's largest economy into recession.

Reuters