CPO hit by India tax news
The commodity’s price retreats after India says will consider 5% duty
PETALING JAYA: The latest news that India is considering a 5% import duty on crude palm oil (CPO) has poured cold water on crude palm oil price that had begun climbing up recently.
Three-month CPO futures fell RM51 to RM2,379 per tonne yesterday. The commodity actually gained RM32 to RM2,430 per tonne a day earlier as Malaysia’s tax-free export was slated to be the catalyst to spur more demand from its major importing countries.
The CPO price has come under pressure recently coming down from RM3,000 level six months ago in view of its excess stock that stood at 2.62 million tonnes as at end December.
According to some news reports, India, the country second largest CPO importer, is considering to impose 5% import duty on CPO to protect its local planters from cheap supplies.
It was reported that India imported 2.63 million tonnes of CPO from Malaysia last year, trailing behind China at 3.5 million tonnes.
Interband Group of Companies senior palm oil trader Jim Teh told StarBiz that the move by India would be negative but at this current price of above RM2,200 per tonne, he added planters were still making a hefty profit as the cost was only between RM1,200 to RM1,500 per tonne.
“The pressure on the CPO price today I assume is just some profit taking move by speculators as CPO futures has been climbing for the last two days,” he said.
Teh also anticipated that CPO stock for the country could swell to 2.65 million tonnes by the end of this month as export has been quite sluggish.
Cargo surveyor Societe Generale de Surveillance reported that exports dipped 22.2% to 571,481 tonnes for the first 15 days of January, accroding to a recent Bernama report.
For plantations companies, Sime Darby Bhd lost 7 sen to RM9.52 , IJM Plantations fell 5 sen to RM2.95 and IOI Corp Bhd slid a sen to RM4.99.