06 August 1999
Malaysian palm oil poised to slide

MALAYSIAN palm oil prices are poised to decline as its production hits the depressed world market for vegetable oils, reports the Financial Times.

Prices have risen recently on reports that Malaysia was seeking to abolish its export tax on palm oil.

News that the USA is experiencing dry weather likely to reduce yields on soya crops has also bolstered palm oil.

But the country is yet to roll out its tax reduction plan.

Production of Malaysian palm oil is expected to increase from 8.3 million tonnes last year to up to 10m tonnes this year.

As a result, defaults on palm oil deliveries have already occurred at destination ports as buyers pull of deals at the last minute to take advantage of better prices.