KUALA LUMPUR, Jan 3 (Reuters) - Malaysian palm oil futures
ended lower in tight trade on Friday as investors feared that
surging supplies of the tropical oil will overwhelm global
demand and weigh on prices.
Indonesia, the top producer, said its 2013 palm oil output
likely grew to 24.4 million tonnes from 23.5 million tonnes a
year ago, due to "an expansion in plantation areas and better
weather conditions".
Output in 2014 is seen rising further, to 28 million tonnes,
its agriculture ministry said on Friday.
Malaysia, the No. 2 producer, expects its production to hit
a record 19.4 million tonnes in 2013 and inch up to 19.5 million
tonnes in 2014.
"The main reason palm oil dropped today is because of the
Indonesian output news," said a trader with a foreign
commodities brokerage.
The benchmark March contract on the Bursa Malaysia
Derivatives Exchange had edged down 0.3 percent to 2,640 ringgit
($802) per tonne by Friday's close. Prices traded in a range of
2,625 to 2,644 ringgit.
Total traded volume stood at 21,029 lots of 25 tonnes, below
the average 35,000 lots.
Crude palm oil could face increased competition from rival
oilseeds that are slated to churn out bumper crops this year.
Technical selling added to the drag on prices, traders said.
"The market has also been up for a number of days before the
New Year. So there's some technical correction, but prices are
still rangebound," the Kuala Lumpur-based trader added.
Better-than-expected exports in December and warnings of
floods over a palm-growing region in Borneo pushed up palm
prices by 0.3 percent this week -- their third straight weekly
rise -- although demand worries capped gains.
Technicals showed that a bearish target at 2,620 ringgit per
tonne remains unchanged for palm oil, as it has broken below a
support at 2,639 ringgit, Reuters market analyst Wang Tao said.
In other markets, Brent crude rose above $108 a barrel after
posting its biggest daily percentage drop in six months in the
prior session, but expectations for a rise in Libyan supply and
speculation of a build-up in U.S. stockpiles capped gains.
In other competing vegetable oil markets, the U.S. soyoil
contract for March rose 0.2 percent in late Asian trade.
The most active May soybean oil contract on the Dalian
Commodities Exchange fell 1.1 percent.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2606 -13.00 2605 2608 78
MY PALM OIL FEB4 2630 -9.00 2616 2633 2060
MY PALM OIL MAR4 2640 -9.00 2625 2644 11162
CHINA PALM OLEIN MAY4 6068 -48.00 6036 6118 529516
CHINA SOYOIL MAY4 6822 -76.00 6812 6880 538488
CBOT SOY OIL MAR4 38.87 +0.07 38.79 39.10 4458
NYMEX CRUDE FEB4 95.31 -0.13 95.13 95.74 14294
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.29 Malaysian ringgit)
- Reuters
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