MARKET DEVELOPMENT
12-07-2004
Asian Cash Palm Oil Prices Mixed; Malaysia Flat Ah
KUALA LUMPUR (Dow Jones) - Asian cash palm oil prices were mixedFriday, with products in Malaysia mostly unchanged in slow trading aheadof important crop data due in the coming days.Palm oil prices have been on the decline so far this month mainlybecause of selling pressure from some large trading houses amid concernsabout poor consumer demand.Products in Malaysia have lost about $20 a metric ton month-to-date,while the benchmark CPO futures contract on the Bursa Malaysia Derivativeshas fallen more than 100 ringgit ($1=MYR3.8) a ton.However, with key supply and demand figures such as the Malaysian PalmOil Board's monthly report looming, participants mostly withdrew to thesidelines Friday. The government-run MPOB is due to issue midday Mondayofficial June data.Private forecaster Palmis Management Bhd. is expected to issue its ownestimates for June before the MPOB report. By midday Friday, Palmis hasyet to issue its figures.Also by Monday, cargo surveyors Intertek Testing Services and SGS(Malaysia) Bhd. are scheduled to issue estimates for Malaysian palm oilexports for the July 1-10 period.Market expectations are for July 1-10 exports to show a slight growthfrom the June 1-10 total. In the first 10 days of June, exports wereestimated at close to 270,000 tons.Traders said buying interest from consumers such as China has shown nosignificant pick-up despite the recent drop in palm oil prices.The CPO futures market fell to a 2004 low this week.China is traditionally the biggest buyer of palm oil. However, credittightening by the government and ample domestic stocks have discouragedimporters from making fresh large purchases, traders said.The impact of the discovery of bird flu in China on the edible oilssector is still uncertain, traders said."So far, we haven't seen any impact yet. I don't think it will make abig difference because the (demand) situation is already very bad," atrader said.Traders estimated that palm oil stocks in major Chinese ports total250,000 tons.In the cash market, CPO for July shipment was offered at 1,490 ringgit($1=MYR3.8) a metric ton, down MYR5 from Thursday, delivered basis inSouth Malaysia.RBD palm oil for July shipment was offered at $415.00/ton, unchangedfrom Thursday.RBD palm olein for July shipment was offered at $425.00/ton, unchangedfrom Thursday.In Indonesia, RBD palm olein was offered at 4,400 rupiah ($1=IDR8,920)a kilogram, down IDR50 from Thursday.