MARKET DEVELOPMENT
11-01-2002
Malaysia palmoil firms on exports, Indonesia tight
KUALA LUMPUR, Jan 10 (Reuters) - Malaysia's palm oil futures were firmeron Thursday on market-friendly export figures and traders said the outlookwas bullish due to steady overseas demand and tightness in Indonesia.Cargo surveyor Intertek Testing Services (ITS) estimated Malaysia's palmoil exports for January 1-10 at 287,626 tonnes, down from 325,389 tonnesin December 1-10."The market has expected the figure to reach 240,000-250,000 tonnes.Instead, exports reached 287,000 tonnes which is above expectations," saidone trader in Malaysia."This is partly due to the problem in Indonesia," said the trader,referring to the world's second largest palm oil producer and Malaysia'smain rival.Another cargo surveyor, Societe Generale de Surveillance Malaysia Sdn Bhd(SGS), whose figures are more closely watched by the market, is due torelease its export estimates for the first 10 days of January after 0600GMT on Thursday.At midday, the benchmark third-month March futures was up seven ringgitat 1,238 ringgit ($325.79) a tonne, after trading as high as 1,247. Volumewas moderate at 1,421 lots.Indonesian authorities said on Wednesday they expected traffic in Belawanport in North Sumatra to return to normal in four or five days as effortsintensify to remove a sunken dredger and clear the port entrance.Some traders said Belawan was digging a new channel, but it would not beable to accommodate big vessels and thus could further affect shipments.Traders said refiners in Indonesia were struggling to meet demand becauseof the tight supplies, adding the road linking Belawan and another mainport, Dumai, was still flooded, disrupting transportation."Vessels have to wait for up to six days in Dumai because of the tightsupply. There's not much crude palm oil available," said one trader.Traders said the Malaysian market could see more palm oil demand fromChina ahead of March, when new rules on genetically modified organism(GMO) products take effect.China said overseas firms exporting GMO products to China must apply forcertificates from the ministry stating that the goods are harmless tohumans, animals or the environment.Beijing initially required government approval for all production, saleand imports of GMO foods, but it failed to issue clear details onimplementation.Confusion over the rules brought new orders of U.S cargoes of soybeans --70 percent of which are bio-engineered -- to a virtual halt as buyersworried cargoes might not be approved.China also crushes soybeans into soyoil.Traders in Malaysia said India's palm oil imports from Malaysia andIndonesia were expected to be steady at around 300,000 tonnes in January.Pakistan, another main buyer, had already booked 120,000 tonnes of palmoil from Malaysia so far this month, they said.In the physical palm oil market, crude palm oil for January in thesouthern and central regions was offered at 1,230 ringgit a tonne againstbids of 1,225.Trade was reported at 1,225 to 1,230 for central.The February contract for south and central was offered at 1,240 ringgitand bid at 1,235. There were no deals.Among refined palm oil products, RBD palm oil for January was offered at$335 a tonne, February at $340, March at $342.50 and April/May/June at$345.RBD palm olein for January saw offers at $350, February at $355, March at$357.50 and April/May/June at $360.RBD stearin for January was offered at $265, February at $272.50 and Marchat $272.50.Palm fatty acid distillates for January and February saw offers at $260.
