Malaysian palm oil extends losses

KUALA LUMPUR: Malaysian palm oil futures declined for a third consecutive session as a stronger ringgit and weaker early-February export estimates weighed on prices.

The benchmark April contract fell to around 4,048 ringgit per tonne. A firmer ringgit added pressure, as it makes Malaysian exports more expensive for overseas buyers.

Traders also monitored movements in rival edible oils. Dalian palm oil futures traded lower, while soyoil prices in China and Chicago edged higher.

The mixed trend left palm oil under pressure, particularly as weakness in its closest substitutes tends to drag prices down.

On the policy front, Malaysia raised the reference price for crude palm oil (CPO) for March but kept the export duty unchanged at 9%, providing little fresh support to the market, according to a circular issued by the Malaysian Palm Oil Board (MPOB) on Thursday.

Malaysia, the world’s second-largest palm oil exporter, set the March reference price at RM3,896.09 per metric tonne, compared with RM3,846.84 per tonne in February, which also carried a 9% duty.

Under Malaysia’s export tax structure, the duty on crude palm oil starts at 3% for prices ranging between RM2,250 and RM2,400 per tonne, with the maximum tax rate capped at 10% when prices exceed RM4,050 per tonne.

Earlier, India and Malaysia pledged Sunday to deepen their semiconductor partnership as the Indian Ocean neighbours ramp up trade and security links during a visit by Prime Minister Narendra Modi.

Modi touched down in Malaysia on Saturday, his first visit in more than a decade, where he inked a number of agreements with Malaysian counterpart Anwar Ibrahim, including deals on renewable energy, health care and artificial intelligence.

“Along with AI and digital technologies, we will advance our partnership in semiconductors, health, and food security,” Modi said.

Malaysia ranks sixth in worldwide exports of semiconductors, while the sector contributes around 25 percent of gross domestic product, according to Malaysian government figures.

Last year India exported $7.32 billion in goods, mainly in engineering and petroleum products, said the India Brand Equity Foundation.

Imports from Malaysia amounted to $12.54 billion, mainly minerals, vegetable oil and electrical machinery and equipment.