palm oil exports slow down as india buys less

KUALA LUMPUR: Palm oil shipments from Malaysia increased at a slower pace in the first 20 days of February on fewer purchases by countries in South Asia including India, the biggest buyer, according to an estimate by surveyor Intertek.

Exports climbed 0.6% to 835,612 tonnes from 830,830 tonnes in the same period in January, Intertek said in an e-mailed statement yesterday.

The gain was smaller than an 18% advance in both the first 10 days and 15 days of the month.

Shipments to South Asia fell 13% to 180,390 tonnes, compared with the same period in January, Intertek data show.

In January, India imposed a tax of 2.5% on crude palm imports and raised the benchmark price on which the tax is applicable to US$802 a tonne from US$447 to shield domestic growers from cheap overseas supplies.

Malaysia reduced taxes on crude export to zero in January and February to clear stockpiles that reached a record 2.63 million tonnes in December.

Reserves slid 1.9% to 2.58 million tonnes last month and prices in Kuala Lumpur gained 5.3% this year.

“The rise in prices may be deterring buyers from India, they may want to wait for prices to drop,” said Arhnue Tan, an analyst at Alliance Investment Bank Bhd here.

India’s import tax may also have reduced shipments, she said.

Shipments from Malaysia will be taxed at 4.5% in March as the reference price was set at RM2,306.11 a tonne, above the threshold of RM2,250 that triggers the tax.

Palm oil for delivery in May climbed dropped 0.4% to RM2,557 a tonne on the Malaysia Derivatives Exchange, after rising earlier by as much as 0.7%. — Bloomberg