Malaysian palm oil price slips as traders wary of Chinese volatility

JAKARTA: Malaysian palm oil futures eased on Monday, tracking other vegetable oils lower as cautious traders eyed the negative impacts of a possible default by Greece on its debt repayment.
    The September palm oil contract on the Bursa
Malaysia Derivatives exchange ended down 0.5 percent at 2,266
ringgit ($599) a tonne at the close, after trading in a range of
2,260 to 2,277 ringgit.
    Palm prices have fallen about 2 percent so far in June and
touched a three-week low last week.
    "Regional equities are all depressed today," said a palm
trader with a foreign commodities brokerage in Malaysia. "People
are watching whether the Shanghai stock market's big drop will
indirectly impact commodity prices."
    European shares sank almost 4 percent and government bond
yields in Italy, Spain and Portugal jumped on Monday as
investors priced in a growing risk that Greece will be the first
country to leave the euro. 
    China shares dived another 3 percent, bringing the losses in
the past two weeks to 25 percent, with the Chinese central
bank's measures on Saturday to support the economy unable to
calm jittery investors. 
    China is a top buyer of palm, which is used mainly as an
ingredient in food such as biscuits and ice cream, and in the
production of biofuels.
    Total traded volume for palm was thin at the close with only
19,111 lots of 25 tonnes each changing hands, compared with the
usual 35,000 lots.
    Palm oil may consolidate in a neutral range of 2,250-2,293
ringgit per tonne for one day before rising again, according to
Reuters market analyst Wang Tao. 
    In other vegetable oils, the U.S. July soyoil contract
 was down 0.8 percent, while the most active January
soybean oil contract on the Dalian Commodity Exchange
slipped 1.4 percent.
    "The only friendly factor is the ringgit," said a second
palm trader, adding that Malaysia's June palm export data from 
cargo surveyors on Tuesday may offer future direction.
    The Malaysian ringgit traded at a 10-year low and
is the currency that benchmark palm is priced in, offering some
support to the tropical oil. 
    In related news, Indonesia's Coordinating Minister of
Economic Affairs, Sofyan Djalil, told reporters that the world's
top producer would now introduce a levy on palm exports on July
16, instead of July 1 as planned. 
    "There are so many technical matters, such as adjusting the
export tax," Djalil said. "We can collect on July 16."
    
  
  Palm, soy and crude oil prices at 1017 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JUL5    2278    +0.00    2270    2291      90
  MY PALM OIL      AUG5    2268   -10.00    2261    2276    2650
  MY PALM OIL      SEP5    2266   -12.00    2260    2277   11296
  CHINA PALM OLEIN JAN6    5106   -54.00    5074    5204  854502
  CHINA SOYOIL     JAN6    5782   -84.00    5762    5894  659902
  CBOT SOY OIL     DEC5   33.39    -0.90   33.33   33.65    6461
  INDIA PALM OIL   JUN5  452.60    -0.90  452.10  453.10     292
  INDIA SOYOIL     AUG5  585.80    -0.55  583.50  586.10   30555
  NYMEX CRUDE      AUG5   58.25    -1.38   58.21   59.12   36062
  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 = 3.7825 ringgit)
($1 = 6.2085 Chinese yuan renminbi)
($1 = 63.8900 Indian rupees)
- Reuters