March 7, 2018 / 7:02 AM / 3 months ago

VEGOILS-Palm oil falls on India tax hike as market awaits outlook

    * Caution over India's tax import dents sentiment
    * Market awaits conclusive industry outlook -trader

    By Fransiska Nangoy
    JAKARTA, March 7 (Reuters) - Malaysian palm oil futures
dipped on Wednesday, as traders worried about the prospect of
cancelled shipments to India and looked for a conclusive outlook
from an industry conference in Kuala Lumpur.
    The benchmark palm oil contract for May delivery
on the Bursa Malaysia Derivatives Exchange was down 0.4 percent
at 2,468 ringgit ($632.66) per tonne by midday break. 
    The vegetable oil was traded within a narrow price range,
with industry participants eyeing forecasts from a two-day palm
industry conference, a trader in Kuala Lumpur said.
    Leading industry analyst Dorab Mistry said on Tuesday he
expects Malaysian palm oil futures to climb to 2,700 ringgit a
tonne by June, up nearly 10 percent from current levels.

    Meanwhile, analyst Thomas Mielke said on Wednesday he
expects Indonesian crude palm oil prices to average $630 a tonne
from April to September, below current levels.
    The two countries count for nearly 90 percent of global palm
oil output.
    Malaysia's benchmark contract in Malaysia was hovering not
far off Monday's one-month low, which followed India's decision
to raise the import tax on palm oil to the highest level in more
than a decade.
    Buyers in India, the world's top vegetable oil importer, are
now seeking to cancel up to 100,000 tonnes of crude palm oil
cargoes due to the higher costs of imports, according to three
trade sources.
    India tax import policy would have big short-term impact on
palm demand, the Kuala Lumpur-based trader said, but he expected
demand to be supported by China.
    "China is pointing toward higher demand for soybeans, which
would benefit our palm oil," the trader said.
    Palm oil prices are affected by movements in rival edible
oils as they compete for a share in the global vegetable oils
market.
    The Chicago Board of Trade's May soybean oil contract
 was down 0.22 percent, while the May soybean oil on
China's Dalian Commodity Exchange fell 1 percent. 
    In technical charting, a break below 2,471 ringgit could
cause a loss into 2,418-2,448 ringgit, said Wang Tao, a Reuters
market analyst for commodities and energy technicals.

    
    Palm, soy and crude oil prices at 0535 GMT
 Contract          Month  Last    Change  Low    High   Volume
 MY PALM OIL       8-Mar       0       0      0      0       0
 MY PALM OIL       8-Apr    2469      -9   2465   2477     303
 MY PALM OIL       8-May    2468     -10   2461   2481    4497
 CHINA PALM OLEIN  8-May    5250     -14   5234   5290  163966
 CHINA SOYOIL      8-May    5792     -60   5756   5852  273362
 CBOT SOY OIL      8-May   32.41    -0.9  32.34  32.56    3376
 INDIA PALM OIL    8-Mar     644    -0.9  641.5  645.9     366
 INDIA SOYOIL      8-Mar   787.5    -1.9    787  789.8    1470
 NYMEX CRUDE       8-Apr   62.11   -0.49  61.83   62.3   43231
 
  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
  India soy oil in Indian rupee per 10 kg
  Crude in U.S. dollars per barrel
 

($1 = 3.9010 ringgit)

 (Reporting by Fransiska Nangoy; editing by Richard Pullin)
  
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