KUALA LUMPUR: Malaysian palm oil futures hit their highest in over a month on Friday, notching their biggest weekly gain in eight weeks as fears of floods disrupting supplies in the world's second-largest producer outweighed earlier losses.
Nearly 120,000 people have been evacuated from their homes
as of Friday afternoon, state news agency Bernama reported, in
the worst flooding Malaysia has seen in decades as heavy rains
pounded the country.
The flooding could reduce crude palm oil output by about 18
percent for December, planters and traders told Reuters, a
bigger disruption than had previously been expected.
Market players said despite the strength of the ringgit
which was up 0.30 percent to 3.4860 per dollar,
investors will likely refrain from a sell-off on prospects of
tighter palm supplies.
"In the short term, there will definitely be some impact on
sentiment. The dropping supply is there for sure," said a trader
with a foreign commodities firm in Kuala Lumpur.
The benchmark March contract inched up 1.4 percent
to 2,249 ringgit ($645) per tonne by Friday's close, after
hitting 2,252 ringgit in late trade, their highest since Nov.
19.
After seven straight days of gains, the contract was up 4.5
percent this week, posting the biggest weekly gain since the end
of October.
Total traded volume stood at 32,884 lots of 25 tonnes, just
below the usual 35,000 lots.
India, the world's biggest vegetable oil buyer, said on
Thursday it will raise its import tax on crude edible oils and
refined oils by 5 percentage points, in a decision that may
dampen palm prices, traders and analysts said.
"This news is negative for palm oil producers as it will
raise the cost of imported edible oils, including palm oil in
India," said CIMB analyst Ivy Ng.
"This will reduce the competitiveness of palm oil against
local edible oils and could hurt demand for palm oil in India,"
she added.
Meanwhile, cargo surveyor Intertek Testing Services reported
that exports of Malaysian palm products during Dec. 1-25 fell
2.3 percent to 1,077,140 tonnes compared with a November - the
first drop this month as shipping activity slowed for the
year-end holiday season.
Another cargo surveyor reported that exports for the same
period fell 1.4 percent.
In other markets, Brent crude oil futures traded steadily
above $60 on Friday as a building supply glut and weak Japanese
import data weighed on the market, while strong U.S. economic
data published over Christmas provided support.
The most active May soybean oil contract on the
Dalian Commodity Exchange rose 0.1 percent in late Asian trade.
The U.S. soyoil contract is closed for Christmas holidays and
will reopen on Monday.
Palm, soy and crude oil prices at 1030 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN5 2250 +33.00 2202 2250 288
MY PALM OIL FEB5 2251 +33.00 2200 2253 1685
MY PALM OIL MAR5 2249 +32.00 2200 2252 18845
CHINA PALM OLEIN MAY5 4932 +0.00 4926 4956 263076
CHINA SOYOIL MAY5 5604 +4.00 5600 5634 203088
CBOT SOY OIL MAR5 32.05 +17.00 0.00 0.00 0
INDIA PALM OIL DEC4 442.80 +17.00 434.70 442.80 749
INDIA SOYOIL JAN5 631.75 +20.85 623.50 634.50 58360
NYMEX CRUDE FEB5 56.37 +0.53 55.68 56.53 19362
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.489 Malaysian ringgit)
($1 = 6.2129 Chinese yuan)
($1 = 63.62 Indian rupee)- Reuetrs
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