Commodity Trading Tips for Crude palm oil by KediaCommodity

Ajay Kumar Kedia 22 January 2014

CPO settled up 0.6% at 533.3 after pickup in demand in the spot market against restricted arrivals from the major producing belts. Further, the hike in India's processed palm oil import tax to 10% from 7.5% has resulted into higher demand for Crude palm oil from India as the refining process is encouraged to be done domestically to save costs too supported crude palm oil prices to some extent. Cargo surveyors on Monday reported that exports of Malaysian palm oil products fell between 15 and 16 percent in the Jan. 1-20 period from a month ago, as demand by the world's biggest palm oil buyer India slackened. Weaker exports could increase Malaysia's inventories, which hit a nine-month high of 1.99 million tonnes at end-December. Malaysia, the world's No. 2 palm oil producer, has kept its crude palm oil export tax for February unchanged at 5 percent, a government circular showed. India crude palm oil imports in December jumped 8.7% on year to 691,740 tons compared to 636,113 tons a year earlier. 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. Technically market is under short covering as market has witnessed drop in open interest by -8.59% to settled at 1479 while prices up 3.2 rupee, now CPO is getting support at 529.3 and below same could see a test of 525.3 level, And resistance is now likely to be seen at 536.1, a move above could see prices testing 538.9.