Sunoil: Black Sea market digests Indian palm oil tax cut

The Black Sea sunoil market awaited direction on the first trading day of 2019 after India, the world's number one vegoil buyer, cut palm oil import tariffs while rallying global vegoil futures lent some support, sources said.

Offers for spot sunoil loading January and February in Ukraine nudged higher to $642/mt, from $640/mt last week, while buyers were bidding at $635/mt for January, up from $630/mt.

That nudged the value for January and February up by $1/ mt at $639/mt and $635/mt, respectively.

However, the assessment of Black Sea sunoil APM-16 remained unchanged at $637/mt as the 20-40-day assessment window rolled forward into February.

Further out the Q2 window was heard offered at $637/mt and bid at $627.5/mt in Chornomorsk, keeping value unchanged at $632/mt.

Yet overall market activity remained muted following the end-of-year period and is expected to only pick up at the start of next week.

On Tuesday, India cut the tariff on crude palm oil from 44% to 40% for Southeast Asian (ASEAN) countries and on refined palm oil from 54% to 50% for Indonesian and to 45% for Malaysian product, a move that is expected to see India buy more palm oil while potentially increasing the global glut of sunoil.

The tariff changes will have an “impact for sure” on the share of India’s soft oil imports, such as soyoil, rapeoil and sunoil, a Ukrainian sunoil trader said, “but we’re still discussing here how much”.

Yet, the cut also sparked rumours that a reduction in soft oils would follow suit, sources said, but traders kept a wait-and-see approach, while asecond source added that those rumours were “baseless”.

Malaysian palm oil futures rallied to a two-week high as India is set to buy more palm oil with the March contract topping MYR2,166/mt ($523.8/mt) giving an initial lift to US soyoil futures.

Those rose further in line with rallying soybean futures on the news that Chinese importer Sinograin was looking to buy more US beans, with the March contract surging nearly 40 points from the open to 28.23 ct/lb ($622.4/mt).

Offers for spot Argentina soyoil retreated marginally by 10 points with January and February oil offered both at 40 points FOB Up River below March futures.