MARKET DEVELOPMENT
VEGOILS-Palm Falls To Near 3-week Low on Poor Export Data
VEGOILS-Palm Falls To Near 3-week Low on Poor Export Data
18/03/2014 (Reuters) - Malaysian palm oil futures fell to a near three-week low on Monday, stretching their losing streak into a fifth session as a weaker-than-expected export data fuelled worries that the recent price rally would shift demand to cheaper competing edible oils.
Cargo surveyor Intertek Testing Services reported that shipments of Malaysian palm products fell 20.7 percent in the first half of March compared with the same period a month ago, after top consumers India and China cut back purchases of the tropical oil.
Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period fell 21.1 percent.
"The higher prices killed the demand. That's why we can see poor exports in March," said a trader with a local commodities brokerage in Kuala Lumpur.
Benchmark prices had surged to an 18-month high of 2,916 ringgit per tonne on March 11 after industry data showed that end-stocks in Malaysia, the world's No.2 producer, dropped to an eight-month low of 1.66 million tonnes.
By Monday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had inched down 1.1 percent to 2,741 ringgit ($837) per tonne. Prices in late trade had dipped to 2,738 ringgit, the lowest level since Feb. 26.
Total traded volume stood at 45,894 lots of 25 tonnes, above the average 35,000 lots.
"Prices have to move lower to attract demand. The market is in a healthy correction phase ... everyone is waiting for 2,650-2,700 ringgit," the trader added.
Market participants earlier anticipated that dry weather would curb Malaysia's palm oil supply in March, cutting down stocks further and boosting prices. But the weaker export demand would offset the drop in production and keep stockpiles relatively unchanged.
Traders said that estimates from a group of millers in southern Peninsular Malaysia showed that palm oil production in that region rose about 8 percent between March 1-15.
In other markets, Brent futures fell below $108 a barrel on Monday, wiping out earlier gains as concerns eased that fighting could erupt after Ukraine's Crimea region voted overwhelmingly to join Russia in a referendum at the weekend.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange lost 0.9 percent.
Palm, soy and crude oil prices at 1020 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2817 -4.00 2804 2830 543
MY PALM OIL MAY4 2772 -24.00 2767 2789 12645
MY PALM OIL JUN4 2741 -30.00 2738 2766 19226
CHINA PALM OLEIN SEP4 6222 -96.00 6204 6268 507034
CHINA SOYOIL SEP4 7004 -64.00 6982 7068 742222
CBOT SOY OIL MAY4 42.06 -0.23 42.01 42.50 6469
NYMEX CRUDE APR4 98.61 -0.28 98.54 99.39 16307
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 = 3.2755 Malaysian ringgit)
($1 = 6.1781 Chinese yuan)
Cargo surveyor Intertek Testing Services reported that shipments of Malaysian palm products fell 20.7 percent in the first half of March compared with the same period a month ago, after top consumers India and China cut back purchases of the tropical oil.
Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period fell 21.1 percent.
"The higher prices killed the demand. That's why we can see poor exports in March," said a trader with a local commodities brokerage in Kuala Lumpur.
Benchmark prices had surged to an 18-month high of 2,916 ringgit per tonne on March 11 after industry data showed that end-stocks in Malaysia, the world's No.2 producer, dropped to an eight-month low of 1.66 million tonnes.
By Monday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had inched down 1.1 percent to 2,741 ringgit ($837) per tonne. Prices in late trade had dipped to 2,738 ringgit, the lowest level since Feb. 26.
Total traded volume stood at 45,894 lots of 25 tonnes, above the average 35,000 lots.
"Prices have to move lower to attract demand. The market is in a healthy correction phase ... everyone is waiting for 2,650-2,700 ringgit," the trader added.
Market participants earlier anticipated that dry weather would curb Malaysia's palm oil supply in March, cutting down stocks further and boosting prices. But the weaker export demand would offset the drop in production and keep stockpiles relatively unchanged.
Traders said that estimates from a group of millers in southern Peninsular Malaysia showed that palm oil production in that region rose about 8 percent between March 1-15.
In other markets, Brent futures fell below $108 a barrel on Monday, wiping out earlier gains as concerns eased that fighting could erupt after Ukraine's Crimea region voted overwhelmingly to join Russia in a referendum at the weekend.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange lost 0.9 percent.
Palm, soy and crude oil prices at 1020 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2817 -4.00 2804 2830 543
MY PALM OIL MAY4 2772 -24.00 2767 2789 12645
MY PALM OIL JUN4 2741 -30.00 2738 2766 19226
CHINA PALM OLEIN SEP4 6222 -96.00 6204 6268 507034
CHINA SOYOIL SEP4 7004 -64.00 6982 7068 742222
CBOT SOY OIL MAY4 42.06 -0.23 42.01 42.50 6469
NYMEX CRUDE APR4 98.61 -0.28 98.54 99.39 16307
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 = 3.2755 Malaysian ringgit)
($1 = 6.1781 Chinese yuan)