KUALA LUMPUR: Malaysian palm oil futures ended lower on Friday, hitting a 2-month low and stretching losses into a seventh day following reports that exports had plunged in early January, spiking fears that palm oil stocks will fluctuate.
Cargo surveyor Intertek Testing Services (ITS) reported that
Malaysian palm oil shipments fell 21 percent to 297,308 tonnes
in the Jan. 1-10 period from a month earlier as crude palm oil
shipments slowed drastically.
Another cargo surveyor, Societe Generale de Surveillance,
showed that exports in the same period fell 22 percent, citing
weaker purchases from top buyers India, Europe and Pakistan.
Prices were also weighed after data from industry regulator
Malaysian Palm Oil Board showed that December end-stocks in the
No.2 producer had edged up to 1.99 million tonnes, missing
market expectations for inventories to ease to 1.96 million
tonnes.
"Coupled with the fact of bad exports, it's overall bad for
prices," said a trader with a foreign commodities brokerage in
Malaysia.
The benchmark March contract on the Bursa Malaysia
Derivatives Exchange had edged down 0.9 percent to 2,519 ringgit
($770) per tonne by Friday's close. Prices traded in a range of
2,511 ringgit to 2,551 ringgit.
Total traded volume stood at 31,791 lots of 25 tonnes,
slightly below the usual 35,000 lots.
After three straight weeks of gains, palm prices have lost
more than 4 percent this week on fears of oversupply of global
edible oils, further dragged by weak competing U.S. and China
soy markets, tracked by palm.
Some investors were concerned that the tropical oil's
refined grade would take a hit after top consumer India raised
import duties.
India, the world's top importer of vegetable oils, on
Thursday raised import duty on refined palm oil to 10 percent
from 7.5 percent.
The decision could shift Indian demand to crude palm oil
(CPO), benefiting Malaysian exporters as the No.2 producer
charges a lower duty on overseas sales than rival Indonesia. But
investors fretted that exports of refined palm products could
plummet and cause stocks to pile up.
"Refined palm olein demand will taper, exports could be hit
hard. The long-term looks bearish as India is a main consumer,"
said a trader with a local commodities brokerage in Kuala
Lumpur.
Technicals showed Malaysian palm oil faces a resistance at
2,555 ringgit per tonne and may revisit its Thursday low of
2,516 ringgit, Reuters market analyst Wang Tao said.
In competing vegetable oil markets, the U.S. soyoil contract
for March fell 0.6 percent in late Asian trade. The most
active May soybean oil contract on the Dalian
Commodities Exchange gained 0.2 percent.
In other markets, oil rebounded from days of declines to
climb towards $107 a barrel on Friday, but gains were capped by
speculation that strong U.S. data could prompt the Federal
Reserve to further taper its stimulus.
Palm, soy and crude oil prices at 1027 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2488 -22.00 2486 2499 17
MY PALM OIL FEB4 2503 -19.00 2492 2533 2975
MY PALM OIL MAR4 2519 -22.00 2511 2551 14603
CHINA PALM OLEIN MAY4 5850 +38.00 5824 5884 611098
CHINA SOYOIL MAY4 6648 +14.00 6634 6692 500784
CBOT SOY OIL MAR4 37.74 -0.22 37.68 38.08 6710
NYMEX CRUDE FEB4 92.55 +0.89 92.20 92.73 13114
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=3.27 Malaysian ringgit)
- Reuters
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