RTRS:VEGOILS-Palm oil ends higher; export tax cut decision on hold
* Malaysia delays decision on crude palm oil export tax
-official
* Palm oil to rebound more to 2,503 ringgit -technicals
* Palm oil due for upward correction to 3,250 ringgit by Q4
-Stanchart
(Updates prices, adds details)
By Chew Yee Kiat
SINGAPORE, Oct 5 (Reuters) - Malaysian palm oil futures
ended higher on Friday as steep losses earlier in the week
helped lure buyers back into the market, while there was also
some positioning ahead of a now delayed decision on a proposal
to cut palm oil export taxes.
Malaysia's cabinet had discussed on Friday a much-awaited
proposal to slash crude palm oil export taxes to 8-10 percent
from 23 percent, which would boost exports.
But the cabinet postponed taking any decision on the
proposal as it needed more time to study the plan, a government
official said.
Prices posted a weekly drop of more than 5 percent, their
third straight weekly decline.
"This rebound is very much within anticipation, selling has
been exhausted," said a dealer with a foreign commodities
brokerage in Malaysia. "There's definitely short covering ahead
of the weekend."
The benchmark December contract on the Bursa
Malaysia Derivatives Exchange rose 2.7 percent to close at 2,415
ringgit ($791) per tonne, after trading in a 2,376-2,448 ringgit
range.
Total traded volumes stood at 39,047 lots of 25 tonnes each,
much higher than the usual 25,000 lots.
Palm oil had shed more than 11 percent on concerns of rising
stocks in the first two days of the week, tumbling to a near
3-year low of 2,230 ringgit per tonne on Wednesday, before
paring losses later in the week.
Technicals showed palm oil would rebound further to 2,503
ringgit as it has cleared a resistance at 2,399 ringgit, said
Reuters market analyst Wang Tao.
After a steep decline in prices in recent weeks, analysts
expect a recovery by the end of the year.
"In our view, crude palm oil (CPO) prices are due for a
significant upward correction, to 3,250 ringgit by end Q4 from
current levels near 2,350 ringgit, after an excessive decline in
September and October," Standard Chartered analyst Abah Ofon
said in a research note.
The recovery will be driven by a drop in Malaysian
production and Indonesian inventories in the fourth quarter as
well as supportive external markets and bullish CPO price
seasonality, the note added.
In a bearish sign for palm oil, Brent crude slid below $112
per barrel on Friday as investors awaited data that is expected
to show U.S. unemployment is on the rise, reinforcing concern
that a fragile global economic recovery is still under threat.
In other vegetable oils markets, U.S. soyoil for December
delivery gained 0.1 percent in late Asian trade. The
Dalian Commodity Exchange is closed for a week-long holiday in
China and will resume trading on Monday.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT2 2250 +61.00 2200 2260 136
MY PALM OIL NOV2 2334 +59.00 2292 2365 785
MY PALM OIL DEC2 2415 +63.00 2376 2448 23051
CHINA PALM OLEIN JAN3 7186 +10.00 7172 7244 220106
CHINA SOYOIL JAN3 9278 +6.00 9250 9328 305268
CBOT SOY OIL DEC2 51.43 -0.01 51.08 51.65 6561
NYMEX CRUDE NOV2 90.99 -0.72 90.76 91.62 20761
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
