Feb. 22 (Bloomberg) -- Palm oil pared a weekly gain on speculation that a possible increase in import taxes by India, the largest cooking oil consumer after China, may curb demand.
The contract for delivery in May closed little changed at 2,534 ringgit ($817) a metric ton on the Malaysia Derivatives Exchange. Futures advanced 2.1 percent this week.
India may raise the tariff on unprocessed oils to 10 percent from 2.5 percent in the federal budget next week, while the tax on refined varieties could increase to 20 percent from 7.5 percent, B.V. Mehta, executive director of the Solvent Extractors’ Association of India, said in a phone interview. India will present its annual budget on Feb. 28 and Finance Minister Palaniappan Chidambaram is seeking to raise revenue, partly by increasing taxes on commodities.
“The news that India may increase the import duty for cooking oils is damping the sentiment,” said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “The cost will be higher in India so the attractiveness of prices will be affected.”
Soybeans for May delivery climbed 1.2 percent to $14.875 a bushel on the Chicago Board of Trade. Soybean oil for May delivery advanced 0.2 percent to 51.80 cents a pound.
Refined palm oil for delivery in September rose 0.6 percent to close at 7,066 yuan ($1,133) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month increased 0.8 percent to end at 8,702 yuan a ton.
--With assistance from Pratik Parija in New Delhi. Editor: Thomas Kutty Abraham