RTRS - Indonesia trade ministry: not backing palm tax change

JAKARTA, Dec 11 (Reuters) - Indonesia's trade ministry is resisting pressure from parts of the palm oil industry to change its export tax system in response to planned tax cuts by rival producer Malaysia, a junior minister said on Tuesday.

A proposed cut in crude palm oil (CPO) export taxes by number two producer Malaysia due to come in next year will make it easier for refiners or producers to ship out CPO when margins for refined palm oil are low.

Malaysia's tax move came almost a year after Indonesia, the world's top producer of the edible oil, reduced export taxes on refined palm oil to boost its processing industry.

The Indonesian Palm Oil Association (GAPKI), which represents mostly plantation firms, has called for a reduction in palm oil export taxes to provide greater parity against Malaysian competitors.

"GAPKI has been proposing that the government changes the palm oil export tax structure," Deputy Trade Minister Bayu Krisnamurthi said, adding that the proposal had not been discussed with other ministries.

"The trade ministry has suggested not changing the export tax scheme, but to invest in infrastructure such as on storage tanks and increase domestic palm oil consumption."

The Malaysian government, in a bid to entice customers, said it plans to cut export taxes for the crude grade to 8-10 percent from 23 percent early next year.

Indonesia has set its December export tax for CPO at 9 percent and 3 percent for RBD palm olein.

On the downstream and processing side of the industry, the Indonesian Vegetable Oil Association says it wants to keep things as they are to maintain consistency in the business.

Last week, Achmad Suryana, director general at the agency for food security in the Indonesian ministry of agriculture, said initial talks had started between different ministries but no decision had been made.

"A technical team has started talking about the possibilities and what is best for Indonesia," Suryana said, at a palm oil conference in Bali, adding that discussions would involve the agriculture, trade and finance ministries.

RTRS - Malaysia crude palm oil export tax seen at zero for Jan

SINGAPORE, Dec 11 (Reuters) - Malaysia will set a tax rate for the export of crude palm oil for January by using the average sales price from Nov. 10 to Dec. 9 as the reference price, a government source said, a level that analysts said could result in zero tax.

The new tax rate comes under a plan approved by the world's second-largest palm oil producer in October to cut crude palm oil (CPO) export taxes as it tries to claw back market share from top producer Indonesia.

Under the new structure, January export taxes are likely be set at zero, given that the average CPO price from Nov. 10 to Dec. 9 fell below the lowest reference price of 2,250 ringgit ($740) per tonne, Maybank Investment Bank said in a research note on Tuesday.

This would help Malaysian exporters ship as much CPO as possible to reduce a record stockpile of 2.56 million tonnes in November.

The government will announce the tax levy on the 15th of every month using Malaysian Palm Oil Board prices for reference and will formalise the January tax in a gazette set to be issued on Dec. 17, said the source, who declined to be identified because he is not authorised to speak to the media.

Malaysian exporters have been concerned that the new tax mechanism could spark a tax war with Indonesia, although the world's largest palm oil producer said it was resisting pressure to change its export tax system in response to Malaysia's planned tax cuts, a junior minister said on Tuesday.

RTRS - India's Nov palm oil imports seen down on month

NEW DELHI, Dec 11 (Reuters) - India's palm oil imports are likely to have fallen in November from October levels, which were the highest in at least three years, as demand shrank with the start of cold weather that solidifies the oil, a Reuters survey showed.

Palm oil imports by the world's top vegetable oil buyer were 840,379 tonnes in October, the last month of the 2011/12 marketing year, as importers raced to buy record stocks in Malaysia, the world's No. 2 producer of the edible oil.

Palm oil imports could have dropped 22.8 percent in November to 648,750 tonnes, the average of forecasts in a survey of eight traders showed on Tuesday.

"Palm oil imports are expected to fall with the start of the winter season and also because of higher domestic supplies of edible oils," said Sat Narain Agarwal, a Delhi-based trader.

Demand for crude palm oil (CPO) usually shrinks in winter as the tropical oil freezes at lower temperatures, while supplies of domestic cooking oil improve as the crushing season for summer harvested oilseed crops such as soybeans gathers momentum.

Traders said CPO imports were likely to have been about 580,000 tonnes last month, while refined, bleached and deodorised (RBD) palmolein imports could have been 72,500 tonnes according to the average of the survey, with a range of 50,000-100,000 tonnes.

In October, India imported 768,336 tonnes of CPO and 61,544 tonnes of RBD palmolein - a record for monthly total palm oil imports in data going back to October 2009, according to the Mumbai-based Solvent Extractors' Association of India (SEA).

The SEA is expected to release its monthly import data for November later this week.

India's refined palm oil imports started a downward trend after duties were raised in August to curb cheap purchases from Indonesia, the world's top palm oil producer, which had tweaked export duties last year to promote its downstream product.

More than half of India's 16-17 million tonnes of edible oils demand is met via imports. A population that is growing at the rate of about 19 million people a year, along with an increasingly wealthy middle class, support higher demand.

About 77 percent of India's cooking oil imports are palm oils, while soft oils such as soy and sunflower make up the rest.

India imports mainly palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil.

The Reuters survey also suggested total vegetable oil imports, including non-edible oils, would fall 25.6 percent in November to 770,375 tonnes from the previous month.

Traders said monthly edible oil imports could fall for the second straight month in December as domestic supplies pick up.

Imports of soyoil and sunflower are likely to have dropped last month as their prices were higher by about $15 per tonne in comparison with October, mainly on concerns due to the slow pace of soybean planting in South America.

Soyoil imports are likely to have fallen 57.9 percent to 38,750 tonnes last month.

The survey showed average estimated stocks at Indian ports at the end of November fell by 3.2 percent to 705,000 tonnes from October.

Traders attributed the drop in imports to a slowdown in demand after Diwali, the festival of lights, when appetite for fried foods increases as families eat large meals together.

"Edible oil imports could fall to around 700,000 tonnes in December in the absence of any seasonal demand trigger in the market," Agarwal said.

RTRS - Palm prices to rise soon on strong export demand- Oil World

HAMBURG, Dec 11 (Reuters) - Global palm oil prices are likely to rise in early 2013 because of high export demand stimulated by current competitive palm prices compared to soyoil, rapeseed oil and other edible oils, Hamburg-based analysts Oil World said on Tuesday.

“We expect palm oil prices to appreciate in the next three months owing to the pick up in export demand, seasonally declining production and the resulting reduction in stocks,” Oil World said.

“Consumers will take advantage of the unusually high current price discounts of palm oil and lauric (palm derivative and coconut) oils in both the food and non-food sectors.”

Crude palm oil for January 2013 delivery was quoted at $770 a tonne cif in Rotterdam and Hamburg on Monday, far below January soyoil at 918 euros a tonne ($1,190) and rapeseed oil for February delivery at 920 euros a tonne ($1,192 ) both fob European mills.

Indonesia and Malaysia are the world’s main palm oil exporters. Soyoil prices are currently high because of poor soybean harvests in South America and the U.S. this year.

“Some countries - for example China and Pakistan - are likely to reduce imports of rapeseed and canola for domestic crushings and instead import larger quantities of competitively-priced palm oil,” Oil World said.

RTRS - Growth in global biodiesel output weakening- Oil World

HAMBURG, Dec 11 (Reuters) - Growth in global biodiesel production is starting to weaken after being strong for years, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“The growth dynamics have been lost in July/December 2012, when many important producers reduced their output of biodiesel,” Oil World said. “This is true primarily for Argentina and the United States but also to a smaller extent for Brazil and the European Union.”

Global calendar-year 2012 biodiesel production will still rise by 0.9 million tonnes on the year to 22.92 million tonnes, the firm forecast. But this rise would be down strongly from the 3.7 million tonne increase in 2011 and the average 2.9 million tonne rise in the previous five years.

Record high soybean prices this summer, due to poor U.S. and South American crops, have reduced the attractiveness of soyoil-based biodiesel, Oil World said.

Also the European Commission, in a major policy shift in September, said it planned to limit food crop-based biofuels to 5 percent of consumption after criticism that biofuel output was responsible for rising global food prices. European biofuel producers say this could devastate their business and bring an end to production of biodiesel from rapeseed in Europe.

EU 2012 biodiesel output will fall to 9.0 million tonnes from 9.13 million in 2011, ending a long period of growth, Oil World said.

U.S. 2012 biodiesel production will still rise to 3.48 million tonnes from 3.29 million tonnes in 2011, but July/December 2012 output is likely to fall by 0.36 million tonnes on the year, and the outlook for 2013 is not positive, it said.

"Given the shortage of U.S. soyoil supplies in 2012/13, it will be difficult to bring biodiesel production to the required level,” it said.

Argentina's 2012 output will rise to 2.45 million tonnes from 2.43 million in 2011, it said, but this will be down from a 0.6 million tonne increase in 2011.

“Biodiesel producers (in Argentina) are currently facing a sharp decline in export sales and a massive reduction of domestic consumption of biodiesel,” it said.

High soyoil prices following the poor 2012 soybean harvest will mean Brazil’s 2012 biodiesel output will fall to 2.29 million tonnes from 2.35 million in 2011, it said.

Brazil’s government may raise compulsory biodiesel blending levels in 2013, improving the outlook for Brazilian producers, it said.

“Future EU biodiesel policies could have a major impact on the Argentine export outlook and thus on actual biodiesel production,” Oil World said.

Trader's highlight

DJI - NEW YORK, Dec 11 (Reuters) - U.S. stocks rose on Tuesday, led by gains in technology companies, helping the S&P 500 end at its highest level since Election Day.

A 2.2 percent gain to $541.39 in Apple's stock lifted the Nasdaq, as the largest U.S. company by market value rebounded from a week in which investors took profits before a possible tax rise next year. Prior to Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Stocks pared some gains by late afternoon as more news on the "fiscal cliff" negotiations emerged. U.S. Senate Majority Leader Harry Reid said it will be difficult to reach agreement resolving the cliff tax hikes and spending cuts before Christmas.

"There's been a real explosion in anxiety over this thing. Because markets have become the way they are, you've got people just stepping back," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"There's a tremendous absence of liquidity in the market," he said.

The S&P 500 had lost 5.3 percent in the seven sessions following Election Day as investors refocused on the threat posed to the economy by the fiscal cliff, a series of automatic spending cuts and tax increases. Markets have mostly recovered those losses, but volume has been thin, suggesting investors are not betting aggressively due to the uncertainty.

The Dow Jones industrial average was up 78.56 points, or 0.60 percent, at 13,248.44. The Standard & Poor's 500 Index was up 9.29 points, or 0.65 percent, at 1,427.84. The Nasdaq Composite Index was up 35.34 points, or 1.18 percent, at 3,022.30.

Volume was roughly 6.43 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

The lack of demonstrable progress in the fiscal cliff negotiations has kept investors from making aggressive bets in recent weeks.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus, which expires at the end of the year.

NYMEX - NEW YORK, Dec 11 (Reuters) - U.S. crude futures edged higher in choppy trading on Tuesday, snapping a string of five straight lower settlements, as news of OPEC production declines in November and a weaker U.S. currency provided lift for dollar-denominated oil prices.

CBOT Soyoil - Soybean futures on the Chicago Board of Trade fell as spillover pressure from a sell-off in wheat offset support from tightening U.S. soybean inventories, traders said.

·    USDA lowered its forecast of U.S. 2012/13 soybean ending stocks to 130 million bushels, in line with trade expectations and down from 140 million in November. The new figure would mark a nine-year low, if realized by the end of August 2013.

·     USDA trimmed its global soybean ending stocks forecast ton 59.93 million tonnes from 60.02 million in November. USDA left its soybean production estimates for Brazil unchanged at 81 million tonnes and Argentina unchanged at 55 million.

·     USDA confirmed export sales of 115,000 tonnes of U.S. soybeans to China for delivery in 2012/13.

·     CBOT January soybeans dipped below its 200-day moving average at $14.68 per bushel, but pared losses and settled above that mark.

·     CBOT soyoil closed lower, despite a drop in USDA's forecast of 2012/13 soyoil ending stocks, on ideas that U.S. soyoil is overpriced on the global vegoils market relative to palm oil.

·   Growth in global biodiesel production is starting to weaken after being strong for years, with profitability hit by record-high soybean prices this summer - oilseeds analysts Oil World.

·     Soymeal gained against soyoil on expectations that commodity index funds will buy soymeal as part of annual rebalancing efforts early in 2013.

·     Losses in soybeans limited by firm cash markets, with basis bids for soybeans shipped by barge to the U.S. Gulf Coast holding steady at historically high levels.

FCPO - SINGAPORE, Dec 11 (Reuters) - Malaysian palm oil futures ended lower on Tuesday, as traders priced in record stocks in the world's second-largest producer of the edible oil.

Malaysia's palm oil inventory level climbed for the fourth straight month to a record 2.56 million tonnes in November, weighing on futures that were headed for the worst annual performance since the 2008 financial crisis.

"We view the latest inventory data negatively as high stocks should keep crude palm oil prices at distressed levels of below 2,500 ringgit per tonne for an extended period well into 2013," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at 2,292 ringgit ($750) per tonne. Prices traded in a range of 2,283 to 2,324 ringgit.

Total traded volumes stood at 38,386 lots of 25 tonnes each, much higher than the usual 25,000 lots.

On the weather front, an absence of El Nino disrupting production could lead to even higher palm oil supplies and pile more pressure on record high stocks, while the latest export data also failed to lift investor sentiment.

Malaysian exports fell 2.8 percent for the first 10 days of December from a month ago, said cargo surveyor Intertek Testing Services. Another cargo surveyor, Societe Generale de Surveillance, reported a 0.4 percent rise for the same period.

But traders are hoping for higher shipments in the next few weeks as planters rush to finish their annual tax-free export quota that expires the end of December and as Chinese buyers stock up before the implementation of a stricter quality requirement on edible oil from next year.

In a bullish sign for palm oil, Brent crude oil rose to around $108 a barrel on Tuesday as a slightly weaker dollar and Middle East unrest supported prices, but stalled fiscal talks in the United States capped gains.

In other vegetable oil markets, U.S. soyoil for January delivery  fell 0.3 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.1 percent lower.

Regional equities - BANGKOK, Dec 11 (Reuters) - The Philippine main index hit an all-time closing high on Tuesday led by market blue chips such as Ayala Land while Indonesia rose to a near two-week high as the central bank's upbeat economic view helped lift sentiment.

The Philippines ended up 1.3 percent at 5,831.50, pushing it up 33.4 percent in the year, Southeast Asia's best. The market rally was in line with the Philippine economy's prospects, backed by strong consumer and government spending.

Jakarta's Composite Index was up 0.4 percent at 4,317.92, led by a 0.7 percent gain in PT Astra International Tbk  a proxy of Indonesia's consumer sector.

Bank Indonesia held its benchmark rate steady at 5.75 percent on Tuesday, aiming to help keep Southeast Asia's largest economy growing at least 6 percent a year and showing it feels inflation remains at a comfortable level.

Thai SET index rose 0.5 percent, with energy firm PTT Exploration and Production Pcl  up 0.3 percent after its offering of 650 million shares was oversubscribed, raising $3 billion in the country's biggest equity sale ever.