Palm recoups early losses after Indonesia hikes export levy, but set for weekly loss
Updates midday prices and adds trader's comments
KUALA LUMPUR, Dec 20 (Reuters) -Malaysian palm oil futures recovered early declines on Friday after Indonesia hiked its export levy, though prices remained on track for a second weekly decline.
The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange was little changed at 4,506 ringgit ($999.11) a metric ton by the midday break, after falling as much as 2.1% earlier in the day.
Still, the contract has declined about 8.1% so far this week.
The market recouped some losses following Indonesia's decision to raise its crude palm oil export levy, a Kuala Lumpur-based trader.
"Bargain buyers have also emerged and narrowed midday losses to close at 4,506 ringgit," the trader said.
Indonesia's chief economic minister on Thursday said it will increase its export levy for crude palm oil to 10% from the current 7.5% to finance higher biodiesel subsidies.
Dalian's most-active soyoil contract DBYcv1 rose 0.45%, while its palm oil contract DCPcv1 shed 1.22%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.12%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit MYR=, palm's currency of trade, weakened 0.16% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices fell on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3%.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may retest support at 4,370 ringgit per metric ton, and a break could open the way towards 4,273 ringgit, Reuters technical analyst Wang Tao said.
($1 = 4.5100 ringgit)
Reporting by Ashley Tang; Editing by Subhranshu Sahu and Varun H K
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