Support for Palm oil

In a move that has surprised some traders Malaysian government has kept export tax on Palm oil at zero for March extending the tax free period which first started in October last year. This is seen an attempt to support prices until demand starts to rebound which is predicted for 2nd quarter of the year. But with crude oil price edging above the $60 level it maybe that more support comes from there. Coconut oil has been hovering above the $1100 lever closing Friday at $1150 on nearby demand.

Desiccated prices are still caught somewhat between the origins.Indonesia remains very cheap caused by strong supply if raw nuts which in turn is being caused somewhat by low crude oil prices. But the Philippines has a much greater and more diverse oil business which means they still have greater demand for raw nuts keeping their prices higher. At the moment nothing much is changing but we are in the low demand season so for now Indonesia can cope with extra requirement but what happens as business picks up towards the summer?