KUALA LUMPUR: Malaysian palm oil futures ended lower in choppy trade on Monday, reversing gains made in the morning session on concerns that a gloomy global economic outlook will weaken prices.
The benchmark contract had risen in early trade to touch
2,336 ringgit as wet weather lifted expectations that January
output could be lower than expected, following flood warnings
from Malaysia's weather bureau for parts of its top growing
regions of Sabah and Sarawak.
"On the local front, there's the weather market at play and
the currency factor that is supportive to palm oil," said a
trader with a foreign commodities brokerage in Kuala Lumpur.
"But on a more extensive global market, crude oil and most
commodity prices are trading on the weak side. This is hanging
over the market," the trader said, adding that the immediate
support level for palm is at 2,300 ringgit.
The benchmark April contract on the Bursa Malaysia
Derivatives Exchange had lost 0.1 percent to 2,304 ringgit
($645) per tonne by Monday's close.
Total traded volume stood at 35,018 lots of 25 tonnes, just
above the typical 35,000 lots.
Palm oil futures may fall this year to their lowest level
since February 2009 despite poor weather in the top growing
countries. Trade may be volatile due to uncertainty in the
global economy, senior industry officials said on Monday.
Drought in Indonesia and floods in Malaysia, which could
damage crops, may cause tight supplies but any El Nino
phenomenon this year will be weak and therefore not as damaging
to output as feared, the officials told a conference in Kuala
Lumpur.
Crude palm oil output in Indonesia and Malaysia supply about
85 percent of the world's palm oil.
An official from the Malaysian Palm Oil Board said that the
Malaysian palm prices could even drop to as low as 1,820 ringgit
this year, but may also rise to as high as 2,750 ringgit.
Elsewhere, Thailand plans to import around 50,000 tonnes of
crude palm oil from February due to a domestic shortage caused
by drought, using a 1.5 billion baht ($46 million) government
fund.
In other markets, Brent crude oil prices fell below $50 a
barrel on Monday after Iraq announced record oil production and
the global economic outlook darkened.
In competing vegetable oil markets, the most active May
soybean oil contract on the Dalian Commodities Exchange
fell 0.7 percent.
Palm, soy and crude oil prices at 1035 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB5 2342 -6.00 2333 2361 288
MY PALM OIL MAR5 2320 -4.00 2317 2354 5909
MY PALM OIL APR5 2304 -3.00 2302 2336 17460
CHINA PALM OLEIN MAY5 4896 -54.00 4760 4982 718154
CHINA SOYOIL MAY5 5584 -40.00 5434 5692 921850
CBOT SOY OIL MAR5 33.39 -1.70 0.00 0.00 0
INDIA PALM OIL JAN5 457.10 -1.70 455.60 459.50 437
INDIA SOYOIL JAN5 677.00 +1.60 675.00 678.50 5820
NYMEX CRUDE FEB5 48.17 -0.52 47.76 48.77 4887
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 = 3.5700 ringgit)
($1 = 6.2203 Chinese yuan)
($1 = 61.77 Indian rupee)
- Reuters
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