Commodity Trading Tips for Crude palm oil by KediaCommodity

Ajay Kumar Kedia 13 January 2014

CPO settled up 0.19% at 536.2 on short covering after prices seen under pressure on worries that exports of the tropical oil's refined grade would take a hit after top consumer India hiked import duties. The decision could shift Indian demand to crude palm oil (CPO), benefiting Malaysian exporters as the No. 2 producer charges a lower duty on overseas sales than rival Indonesia. The Malaysian Palm Oil Board's stocks report, released after the midday break, showed that Malaysia's inventories at the end of December rose 0.3 percent to 1.99 million tonnes from November, missing market estimates for a 1 percent fall. Exports of Malaysian palm oil products for Jan. 1-10 fell 21.5 percent to 297,308 tonnes from 378,579 tonnes for Dec. 1-10, cargo surveyor Intertek Testing Services said. India increased import duties on refined edible oils, including palm oil, to 10 percent from 7.5 percent to protect local oilseed growers and refiners against cheaper supplies from major exporters. The decision could shift demand in India, the world's leading importer of vegetable oils, to crude palm oil (CPO), benefiting Malaysian exporters as the country charges a lower duty on overseas CPO sales than rival producer Indonesia. India's refined palm oil imports surged 40.5 percent to 2.2 million tonnes in the year to October 2013 as Indonesia structured taxes to favour exports of refined products over crude to support its refining industry. Technically market is under fresh buying as market has witnessed gain in open interest by 5.33% to settled at 2253 while prices up 1 rupee, now CPO is getting support at 534.4 and below same could see a test of 532.7 level, And resistance is now likely to be seen at 537.5, a move above could see prices testing 538.9.