MARKET DEVELOPMENT
VEGOILS-Palm Slips on Poor Export Data, Weak Overseas Soy Markets
VEGOILS-Palm Slips on Poor Export Data, Weak Overseas Soy Markets
21/03/2014 (Reuters) - Malaysian palm oil futures ended lower Thursday after a slight pick-up a day earlier, to fall for seven out of the last eight sessions, as poor export data stoked concerns of dwindling global demand for the tropical oil.
Cargo surveyor Intertek Testing Services reported that shipments of Malaysian palm oil products fell 12.3 percent to 767,785 tonnes in March 1-20 compared to a month ago as India, the world's largest edible oil buyer, reduced imports of palm.
Another cargo surveyor Societe Generale de Surveillance showed exports for the same period fell 12.0 percent.
"Even though we have additional days in March, it's not really helping the exports," said a trader with a foreign commodities brokerage in Malaysia.
"If you tabulate the export numbers for the whole month, it will be about 1.3 million tonnes, which is slightly lower than February's exports," the trader added.
By Thursday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.1 percent to 2,774 ringgit ($842) per tonne. Despite the technical bounce that saw prices rising to 2,786 ringgit on Wednesday, palm prices have fallen nearly 1 percent so far this week.
Total traded volume stood at 39,371 lots of 25 tonnes, just above the average 35,000 lots.
Prices were also pressured by losses in competing soyoil markets overseas. 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 1.9 percent.
Weaker soyoil prices narrows palm's discount to the rival oil.
But traders said inventories of palm oil in Malaysia, the world's second-largest producer, will likely further tighten from its current eight-month low of 1.66 million tonnes, and bolster benchmark prices.
"It is still a good time to buy because stocks are still relatively low," the Malaysia-based trader added. "March end-stocks will be lower than February, and that will support prices later on."
Some market players say demand for palm oil from India, Pakistan and the Middle East will rise at end-March or early April as buyers re-stock ahead of the Muslim festival of Eid al-Fitr.
In other markets, Brent crude oil eased on Thursday after the U.S. Federal Reserve indicated it could end its stimulus programme and raise interest rates sooner than expected.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2867 -4.00 2840 2871 129
MY PALM OIL MAY4 2808 -4.00 2768 2814 6672
MY PALM OIL JUN4 2774 -3.00 2735 2780 20223
CHINA PALM OLEIN SEP4 6146 -110.00 6132 6248 589600
CHINA SOYOIL SEP4 6864 -134.00 6850 6968 847964
CBOT SOY OIL MAY4 41.95 -0.15 41.68 42.14 7864
NYMEX CRUDE APR4 100.11 -0.26 100.10 100.82 1581
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 = 3.295 Malaysian ringgit)
($1 = 6.2275 Chinese yuan)
Cargo surveyor Intertek Testing Services reported that shipments of Malaysian palm oil products fell 12.3 percent to 767,785 tonnes in March 1-20 compared to a month ago as India, the world's largest edible oil buyer, reduced imports of palm.
Another cargo surveyor Societe Generale de Surveillance showed exports for the same period fell 12.0 percent.
"Even though we have additional days in March, it's not really helping the exports," said a trader with a foreign commodities brokerage in Malaysia.
"If you tabulate the export numbers for the whole month, it will be about 1.3 million tonnes, which is slightly lower than February's exports," the trader added.
By Thursday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.1 percent to 2,774 ringgit ($842) per tonne. Despite the technical bounce that saw prices rising to 2,786 ringgit on Wednesday, palm prices have fallen nearly 1 percent so far this week.
Total traded volume stood at 39,371 lots of 25 tonnes, just above the average 35,000 lots.
Prices were also pressured by losses in competing soyoil markets overseas. 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 1.9 percent.
Weaker soyoil prices narrows palm's discount to the rival oil.
But traders said inventories of palm oil in Malaysia, the world's second-largest producer, will likely further tighten from its current eight-month low of 1.66 million tonnes, and bolster benchmark prices.
"It is still a good time to buy because stocks are still relatively low," the Malaysia-based trader added. "March end-stocks will be lower than February, and that will support prices later on."
Some market players say demand for palm oil from India, Pakistan and the Middle East will rise at end-March or early April as buyers re-stock ahead of the Muslim festival of Eid al-Fitr.
In other markets, Brent crude oil eased on Thursday after the U.S. Federal Reserve indicated it could end its stimulus programme and raise interest rates sooner than expected.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2867 -4.00 2840 2871 129
MY PALM OIL MAY4 2808 -4.00 2768 2814 6672
MY PALM OIL JUN4 2774 -3.00 2735 2780 20223
CHINA PALM OLEIN SEP4 6146 -110.00 6132 6248 589600
CHINA SOYOIL SEP4 6864 -134.00 6850 6968 847964
CBOT SOY OIL MAY4 41.95 -0.15 41.68 42.14 7864
NYMEX CRUDE APR4 100.11 -0.26 100.10 100.82 1581
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 = 3.295 Malaysian ringgit)
($1 = 6.2275 Chinese yuan)