Palm slips over 1% after no duty waiver but still log weekly gain

Malaysian palm oil futures fell more than 1% on Friday after the government's Budget did not include an export duty waiver that the market had expected. Business Recorder reported that the October delivery contract on Bursa Malaysia Derivatives closed 69 ringgit lower, or 1.48%, at 4,592 ringgit ($1,124.66) per metric ton. Despite the drop, the contract still recorded a weekly gain of 1.26%, its first in three weeks.

Trader David Ng of Iceberg X Sdn Bhd said the earlier gains reversed as hopes for a possible duty waiver faded. Traders had expected Malaysia might propose removing export duties on crude palm oil to make its shipments more competitive against Indonesia. Instead, the budget only contained support for smallholders, focused on replanting assistance.

Ng expects subdued trading next week as investors look ahead to the MPOB supply and demand report, focusing on September stocks and shipments. According to a Reuters survey, Malaysian stocks are projected to peak in September above the December 2018 level, as output rose to record volumes while export demand stayed sluggish. MPOB data is due Monday, and the ringgit strengthened 0.12% against the dollar, making the commodity slightly dearer for foreign buyers.