Palm gains on better export estimates, expectations of weak output
Updates midday prices and adds trader's comments
KUALA LUMPUR, Oct 21 (Reuters) -Malaysian palm oil futures edged higher on Monday, after two sessions of decline, underpinned by higher export estimates and anticipated seasonal palm production declines.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange gained 49 ringgit, or 1.15%, to 4,304 ringgit ($1,001.16) a metric ton during the midday break.
The contract fell 1.3% in the last two consecutivesessions.
Palm prices today are reacting towards better export estimates and expectations of weaker output in the coming weeks in line with seasonal weakness, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Cargo surveyor Intertek Testing Services estimated that exports of Malaysian palm oil products rose 8.7% during Oct. 1-20, while AmSpec Agri Malaysia's data is due laterin the day.
The Malaysian Palm Oil Board (MPOB) reported earlier this month that crude palm oil production was down 3.8% in September from August, while palm oil exports rose 0.93%.
Dalian's most-active soyoil contract DBYcv1 fell 0.58%, while its palm oil contract DCPcv1 shed 0.76%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.6%.
Palm oil tracks prices of rival edible oils as they compete for a share of the global vegetable oils market.
Oil prices steadied in early trading, following a more than 7% drop last week on demand worries in China, the world's top oil importer, and an easing of concerns over potential supply disruptions in the Middle East. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit MYR=, palm's currency of trade, strengthened 0.07% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
Malaysia plans to raise the threshold for a windfall profit levy (WPL) on palm oil and will revise the export duty for crude palm oil, Prime Minister Anwar Ibrahim said.
A higher WPL will reduce the pressure of the increase in the cost of palm oil production, MPOB said, according to state news agency Bernama, while export tax adjustments will help the palm oil refining industry get similar advantages compared to Indonesia in the downstream segment, Glenauk Economics said.
($1 = 4.2990 ringgit)
Reporting by Ashley Tang; Editing by Sumana Nandy
For a table on Malaysian physical palm oil prices, including refined oil, Reuters Terminal users can double click on or type OILS/MY01. * To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in OILS/ASIA2 and press enter, or double click between the brackets. * Reuters Terminal users can see cash and futures edible oil prices by double clicking on the codes in the brackets: To go to the next page in the same chain, hit F12. To go back, hit F11. Vegetable oils OILS/ASIA1 Malaysian palm oil exports SGSPALM1 CBOT soyoil futures 0#BO: CBOT soybean futures 0#S: Indian solvent SOLVENT01 Dalian Commodity Exchange DC/MENU Dalian soyoil futures 0#DBY: Dalian refined palm oil futures 0#DCP: Zhengzhou rapeseed oil 0#COI: European edible oil prices/trades OILS/E
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