MARKET DEVELOPMENT
VEGOILS-Palm Posts Biggest Weekly Loss in Nine on Demand Fears, Higher Stocks
VEGOILS-Palm Posts Biggest Weekly Loss in Nine on Demand Fears, Higher Stocks
11/01/2014 (Reuters) - 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)
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)