Palm oil falls more than 1% after Malaysia leaves export duty unchanged

Malaysian palm oil futures fell more than 1% on Friday after the government did not announce the expected export duty waiver. The October contract on Bursa Malaysia Derivatives dropped by 69 ringgit, or 1.48%, to 4,592 ringgit ($1,124.66)/t.

The market had expected Malaysia to temporarily waive the export duty on crude palm oil to make shipments more competitive with Indonesia. However, the government’s budget included only support measures for smallholders, including assistance with plantation replanting.

Despite Friday’s decline, palm oil gained 1.26% over the week, marking its first weekly increase in three weeks. Traders will now focus on the upcoming Malaysian Palm Oil Board report on inventories, production and exports.

Market participants expect Malaysia’s palm oil stocks to have reached an all-time high in September, surpassing the previous record set in December 2018. The buildup reflects sharply higher production combined with sluggish export demand.

Lower crude oil prices also weighed on palm oil by reducing its attractiveness as a biodiesel feedstock. Meanwhile, soyoil prices in Dalian and Chicago moved higher, providing some support to the palm oil market.

Tags: prices, Malaysia, palm oil