KUALA LUMPUR: Malaysian palm oil futures fell more than 1% on Thursday, pressured by losses in related edible oils and concerns that top buyer India may increase import taxes.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 1.4% at 2,221 ringgit ($530) per tonne, its biggest one-day decline since mid-August.

It earlier fell as much 1.6% to 2,216 ringgit, its lowest level since Aug. 22.

“The market opened earlier tracking weakness in Dalian,” said a Kuala Lumpur-based futures trader, referring to related edible oils on China’s Dalian CommodityADVERTISING

“There is also some correction now after a fast runup,” he said, after a rally in palm oil prices had taken them to a more than six-month high on Monday.

India’s trade ministry on Monday recommended raising the tax on refined palm oil imports from Malaysia to 50% from 45% to curb cheaper purchases of the commodity from overseas rather than at home, a government document showed.

India currently imposes a 40% import tax on crude palm oil and 50% on refined palm oils.

But refined palm oil shipments from Malaysia have been taxed at 45% since January, under an agreement between the two countries.

In other related oils, U.S. soyoil futures on the Chicago Board of Trade were last down 0.2%, while the September soyoil contract on the Dalian exchange fell 0.1%.

Meanwhile, the Dalian September palm oil contract edged down 0.2%.

Palm oil prices are affected by movements in related oils, as they compete for a share in the global vegetable oils market. – Reuters

Source : The Star