RTRS:VEGOILS-Palm oil ends flat, Malaysian export tax cut in focus
* Futures flat in choppy trade at 2,352 ringgit
* Palm oil still targets 2,127-2,181 ringgit range
-technicals
* Malaysian government could cut crude palm oil export taxes
to 8-10 percent
* Indian traders seek discounts to curb losses from futures
contract
(Updates throughout)
By Chew Yee Kiat
SINGAPORE, Oct 4 (Reuters) - Malaysian palm oil futures
ended flat on Thursday, as traders awaited a government decision
on a proposal to cut export tax on the crude shipments that
could help spur exports at a time when stocks are rising at a
faster pace.
The commodities minister in the world's No.2 producer of the
edible oil said he will propose to cut crude palm oil export
taxes to 8-10 percent from a current 23 percent in a bid to
counter competition from top producer Indonesia.
Malaysia's cabinet is likely to decide on the proposal on
Friday.
Indonesia has taken up a greater market share of refined
palm oil products after it adjusted its export tax regime to
derive greater margins for processors, which helped to slow
Malaysia's own shipments as production grew.
This has led to a stock build up with palm oil futures
losing more than a quarter of its gains since the start of this
year.
Palm oil futures have also come under pressure from the
festering euro zone debt crisis that has clouded the outlook for
economic and commodity demand growth.
"The biggest question is whether this proposal will be
accepted and if so, when will it come into effect?" said a
trader with a foreign commodities firm in the Malaysian capital.
At the close, the benchmark December contract on
the Bursa Malaysia Derivatives Exchange edged up one ringgit at
2,352 ringgit ($770) a tonne after going as high as 2,404
ringgit in choppy trade.
Total traded volumes stood at 33,333 lots of 25 tonnes each,
higher than the usual 25,000 lots as some traders took up
positions ahead of the decision expected on Friday.
Technicals showed that prices remain in a bearish target
range of 2,127-2,181 ringgit and gains from the current level
could be limited to 2,422 ringgit, said Reuters market analyst
Wang Tao.
Palm oil tumbled to its lowest in nearly three years on
Tuesday on the back of lacklustre shipments and growing stocks,
raising concerns of contract defaults or delays from top buyer
India.
Any contract defaults could slow the export pace and push
Malaysia's September palm oil stocks above a ten month high of
2.1 million tonnes seen in August.
In a bullish sign for palm oil, Brent crude oil rose towards
$109 per barrel on Thursday as expectations Spain would seek a
bailout and better U.S. data encouraged investors back into
riskier assets such as oil and commodities.
U.S. soyoil for December delivery gained 0.4 percent
in late Asian trade. The Dalian Commodity Exchange is closed for
a week-long holiday in China and will resume trading on Oct. 8.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT2 2189 +6.00 2189 2205 19
MY PALM OIL NOV2 2275 +6.00 2234 2307 1291
MY PALM OIL DEC2 2352 +1.00 2321 2404 19851
CHINA PALM OLEIN JAN3 7186 +10.00 7172 7244 220106
CHINA SOYOIL JAN3 9278 +6.00 9250 9328 305268
CBOT SOY OIL DEC2 50.92 +0.19 50.61 51.03 6778
NYMEX CRUDE NOV2 88.77 +0.64 87.91 88.80 24093
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
