MARKET DEVELOPMENT
VEGOILS-Palm Oil up on Better Exports, Logs First Annual Gain in 3 Years
VEGOILS-Palm Oil up on Better Exports, Logs First Annual Gain in 3 Years
01/01/2014 (Reuters) - Malaysian palm oil futures ended higher on Tuesday after a slight recovery in exports signalled rising food and fuel demand for the edible oil, triggering speculative buying that lifted prices to their first annual gain in three years.
Cargo surveyor Intertek Testing Services reported that Malaysian palm oil exports in December slipped 1.1 percent from November, improving from steeper declines earlier in the month, partly due to bigger imports from China.
"Exports were certainly better than expected and this encouraged a lot of speculative buying," said a trader with a local commodities brokerage.
"This could be the factor keeping prices above the 2,600 ringgit level," the Malaysia-based trader added.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange inched up 1.1 percent to 2,660 ringgit ($811) per tonne by Tuesday's close. Prices traded in a range between 2,614 and 2,661 ringgit.
Traded volume stood at 17,336 lots of 25 tonnes, less than half the average 35,000 lots as the year-end holiday slowed trading momentum.
The Malaysian palm market, which sets the tone for global prices, has climbed 9.1 percent this year - its first annual gain since 2010. Average prices in 2012 had plunged 23 percent.
A Reuters poll of 25 analysts in June had predicted average prices in 2013 to drop 15 percent from a year earlier to 2,500 ringgit as the oilseed faces slowing demand in key markets and increased competition from rival soyoil.
But after hitting a four-year low of 2,137 ringgit at end-July, prices slowly recovered losses after top palm producer Indonesia said it would raise its minimum bio content in diesel to 10 percent from 2014 onwards.
Malaysia said it was working to hike its own requirements in an effort to whittle down stockpiles and cushion prices.
Crude palm oil is being increasingly used as an additive to fossil fuels as it can cut costs and reduce environmentally damaging emissions.
Analysts say palm oil prices could strengthen in the first quarter of 2014 due to rising demand from the biofuel industry and a recovery in the global economy, although bumper crops of competing vegetable oils could curb gains.
Another cargo surveyor, Societe Generale de Surveillance, will release export data for December later on Tuesday.
In other markets, Brent futures held above $111 a barrel on Tuesday on worries about a prolonged outage from OPEC member Libya, positioning the benchmark to end 2013 virtually
unchanged.
In other competing vegetable oil markets, the U.S. soyoil contract for March rose 0.6 percent in late Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange fell 1.2 percent.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2629 +26.00 2592 2629 99
MY PALM OIL FEB4 2650 +26.00 2606 2650 1276
MY PALM OIL MAR4 2660 +29.00 2614 2661 10592
CHINA PALM OLEIN MAY4 6038 -42.00 6016 6072 523028
CHINA SOYOIL MAY4 6850 -80.00 6842 6894 430684
CBOT SOY OIL MAR4 39.20 +0.24 38.88 39.23 5205
NYMEX CRUDE FEB4 99.02 -0.27 98.90 99.39 6268
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=3.28 Malaysian ringgit)
Cargo surveyor Intertek Testing Services reported that Malaysian palm oil exports in December slipped 1.1 percent from November, improving from steeper declines earlier in the month, partly due to bigger imports from China.
"Exports were certainly better than expected and this encouraged a lot of speculative buying," said a trader with a local commodities brokerage.
"This could be the factor keeping prices above the 2,600 ringgit level," the Malaysia-based trader added.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange inched up 1.1 percent to 2,660 ringgit ($811) per tonne by Tuesday's close. Prices traded in a range between 2,614 and 2,661 ringgit.
Traded volume stood at 17,336 lots of 25 tonnes, less than half the average 35,000 lots as the year-end holiday slowed trading momentum.
The Malaysian palm market, which sets the tone for global prices, has climbed 9.1 percent this year - its first annual gain since 2010. Average prices in 2012 had plunged 23 percent.
A Reuters poll of 25 analysts in June had predicted average prices in 2013 to drop 15 percent from a year earlier to 2,500 ringgit as the oilseed faces slowing demand in key markets and increased competition from rival soyoil.
But after hitting a four-year low of 2,137 ringgit at end-July, prices slowly recovered losses after top palm producer Indonesia said it would raise its minimum bio content in diesel to 10 percent from 2014 onwards.
Malaysia said it was working to hike its own requirements in an effort to whittle down stockpiles and cushion prices.
Crude palm oil is being increasingly used as an additive to fossil fuels as it can cut costs and reduce environmentally damaging emissions.
Analysts say palm oil prices could strengthen in the first quarter of 2014 due to rising demand from the biofuel industry and a recovery in the global economy, although bumper crops of competing vegetable oils could curb gains.
Another cargo surveyor, Societe Generale de Surveillance, will release export data for December later on Tuesday.
In other markets, Brent futures held above $111 a barrel on Tuesday on worries about a prolonged outage from OPEC member Libya, positioning the benchmark to end 2013 virtually
unchanged.
In other competing vegetable oil markets, the U.S. soyoil contract for March rose 0.6 percent in late Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange fell 1.2 percent.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2629 +26.00 2592 2629 99
MY PALM OIL FEB4 2650 +26.00 2606 2650 1276
MY PALM OIL MAR4 2660 +29.00 2614 2661 10592
CHINA PALM OLEIN MAY4 6038 -42.00 6016 6072 523028
CHINA SOYOIL MAY4 6850 -80.00 6842 6894 430684
CBOT SOY OIL MAR4 39.20 +0.24 38.88 39.23 5205
NYMEX CRUDE FEB4 99.02 -0.27 98.90 99.39 6268
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=3.28 Malaysian ringgit)