KUALA LUMPUR: Malaysian palm oil futures ended higher on Tuesday, as weakening production fuelled optimism that inventories of the tropical oil may be lower than initially expected when final numbers for October are reported.
A Reuters survey of industry officials pegs Indonesia's
inventories at 2.38 million tonnes at end-October from 2.50
million tonnes in September.
Traders though said sluggish demand and bumper soybean
supplies would limit gains.
Crude palm oil output in Indonesia and Malaysia, which
together supply about 85 percent of the world's palm oil,
typically weakens towards the year end due to the rainy monsoon
season.
"Worries about production, the weaker ringgit and end-stocks
that may not be as huge as estimated was the catalyst today,"
said a trader with a local commodities firm in Malaysia.
"Demand is not picking up, and favourable weather conditions
in the U.S. and South America will cap any short-covering
rallies," the trader added.
The benchmark February contract on the Bursa
Malaysia Derivatives Exchange rose 0.9 percent to 2,251 ringgit
($671) per tonne by Tuesday's close. Total traded volume stood
at 39,206 lots of 25 tonnes, above the usual 35,000 lots.
Market players said palm futures, which have dropped more
than 15 percent so far this year, have been firm overall despite
the slide in crude prices and dwindling export demand.
"Looks like 2,200 ringgit is the base for now until there
are new leads from the fundamental side," a second Kuala
Lumpur-based trader said.
Brent crude oil reversed early losses to rise back towards
$80 a barrel on Tuesday, recovering from last week's four-year
low as speculation increased that OPEC could cut output at its
meeting on Nov. 27.
Cargo surveyors reported on Monday that exports of Malaysian
palm oil products fell 2.5-4.5 percent in the first half of
November compared to the same period a month ago, as imports by
Europe, India and the U.S. fell.
In competing vegetable oil markets, the U.S. soyoil contract
for December rose 0.2 percent in late Asian trade, while
the most active May soybean oil contract on the Dalian
Commodities Exchange fell 0.5 percent.
Palm, soy and crude oil prices at 1033 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC4 2230 +22.00 2210 2231 275
MY PALM OIL JAN5 2243 +24.00 2220 2250 8815
MY PALM OIL FEB5 2251 +21.00 2225 2254 19995
CHINA PALM OLEIN MAY5 5334 -14.00 5286 5366 732726
CHINA SOYOIL MAY5 5870 -30.00 5826 5914 381918
CBOT SOY OIL DEC4 32.52 -1.70 32.10 32.54 5884
INDIA PALM OIL NOV4 447.30 -1.70 445.20 449.00 460
INDIA SOYOIL NOV4 573.50 -2.40 573.00 576.00 1645
NYMEX CRUDE DEC4 76.26 +0.62 75.17 76.44 23122
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 = 3.354 Malaysian ringgit)
($1 = 6.1213 Chinese yuan)
($1 = 61.76 Indian rupee)- Reuters
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