Palm oil has continued to outperform both a bean oil market in shallow decline since the start of September and a gasoil market which has essentially flatlined over the same period. Front month palm spreads open discounted to rapeseed oil by $278/t, the tightest they have been in just over a month. Spreads to bean oil meanwhile have shed more than $5/t since Friday, although they remain slightly wider than the levels seen mid last week.
The market appears to be brushing off any immediate concerns that India’s duty hike on palm imports will do much to slow overseas buying, with the weak Malaysian Ringgitt offsetting some of palm’s price rally in dollar terms.
Malaysian exports in the 1-20 September period were up 7.6% YoY at just under 1mn t. Continued imports into Indian will likely keep domestic producers pursuing strong lobbying efforts to get the government to hike the tax further.