MARKET DEVELOPMENT
VEGOILS-Palm Drops To 4-Mth Low on Slowing Exports, China Data
VEGOILS-Palm Drops To 4-Mth Low on Slowing Exports, China Data
17/04/2013 (Reuters) - Malaysian palm oil futures fell to a 4-month low on Monday, hurt by easing exports and disappointing Chinese data that raised concerns about the outlook for global commodity demand.
Slower-than-expected economic growth in China, the world's second-largest economy, triggered broad-based selloffs in commodities markets such as gold and crude oil.
The most active soybean oil contract in Dalian tumbled to the lowest since its initiation last September, putting further pressure on palm oil especially after cargo surveyor Intertek Testing Services reported slower exports for the first half of April compared to the same period a month ago.
"Exports were slower than expected, but the market is also affected by the poor performance in other commodities," said a trader with local commodities brokerage in Malaysia. "If the global economy is not good, the buying strength won't be there."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange lost 2.2 percent to close at 2,294 ringgit ($755) per tonne. Prices earlier fell to 2,281 ringgit, the lowest seen since Dec. 14.
Total traded volumes stood at 37,179 lots of 25 tonnes each, higher than the average 35,000 lots.
China's economy grew 7.7 percent in the first quarter, undershooting market expectations for an 8.0 percent expansion and frustrating investors hoping the economy would rebound after posting its weakest growth in 13 years in 2012.
On top of that, persisting worries that a bird flu outbreak in China could hurt soy demand also weighed on vegetable oil markets, with the most active September soybean oil contract on the Dalian Commodities Exchange falling by as much as 2.5 percent.
Soyoil is a close competitor of palm oil and a fall in prices of the former could wean away demand from the latter.
U.S. soyoil for May delivery lost 0.8 percent in late Asian trade.
Technical analysis showed palm oil is expected to drop to 2,249 ringgit per tonne, as indicated by its wave pattern and a Fibonacci projection analysis, said Reuters market analyst Wang Tao.
Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for May at 4.5 percent, unchanged from April, a government circular showed on Monday.
Official data showed that stocks in the southeast Asian country posted a higher-than-expected decline to 2.17 million tonnes in March, helped by a 10 percent increase in exports.
In other markets, Brent crude oil sank below $101 a barrel on Monday to a nine-month low after bleak Chinese and U.S. data stoked worries of a slowdown in economic growth in the world's top oil consumers.
Palm, soy and crude oil prices at 1019 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR3 2300 -5.00 2300 2300 22
MY PALM OIL MAY3 2278 -49.00 2274 2301 1228
MY PALM OIL JUN3 2294 -51.00 2281 2325 15856
CHINA PALM OLEIN SEP3 6168 -138.00 6130 6276 548920
CHINA SOYOIL SEP3 7678 -170.00 7654 7798 785948
CBOT SOY OIL MAY3 48.84 -0.39 48.71 49.25 8040
NYMEX CRUDE MAY3 88.54 -2.75 88.05 90.98 57568
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=3.04 ringgit)
Slower-than-expected economic growth in China, the world's second-largest economy, triggered broad-based selloffs in commodities markets such as gold and crude oil.
The most active soybean oil contract in Dalian tumbled to the lowest since its initiation last September, putting further pressure on palm oil especially after cargo surveyor Intertek Testing Services reported slower exports for the first half of April compared to the same period a month ago.
"Exports were slower than expected, but the market is also affected by the poor performance in other commodities," said a trader with local commodities brokerage in Malaysia. "If the global economy is not good, the buying strength won't be there."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange lost 2.2 percent to close at 2,294 ringgit ($755) per tonne. Prices earlier fell to 2,281 ringgit, the lowest seen since Dec. 14.
Total traded volumes stood at 37,179 lots of 25 tonnes each, higher than the average 35,000 lots.
China's economy grew 7.7 percent in the first quarter, undershooting market expectations for an 8.0 percent expansion and frustrating investors hoping the economy would rebound after posting its weakest growth in 13 years in 2012.
On top of that, persisting worries that a bird flu outbreak in China could hurt soy demand also weighed on vegetable oil markets, with the most active September soybean oil contract on the Dalian Commodities Exchange falling by as much as 2.5 percent.
Soyoil is a close competitor of palm oil and a fall in prices of the former could wean away demand from the latter.
U.S. soyoil for May delivery lost 0.8 percent in late Asian trade.
Technical analysis showed palm oil is expected to drop to 2,249 ringgit per tonne, as indicated by its wave pattern and a Fibonacci projection analysis, said Reuters market analyst Wang Tao.
Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for May at 4.5 percent, unchanged from April, a government circular showed on Monday.
Official data showed that stocks in the southeast Asian country posted a higher-than-expected decline to 2.17 million tonnes in March, helped by a 10 percent increase in exports.
In other markets, Brent crude oil sank below $101 a barrel on Monday to a nine-month low after bleak Chinese and U.S. data stoked worries of a slowdown in economic growth in the world's top oil consumers.
Palm, soy and crude oil prices at 1019 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR3 2300 -5.00 2300 2300 22
MY PALM OIL MAY3 2278 -49.00 2274 2301 1228
MY PALM OIL JUN3 2294 -51.00 2281 2325 15856
CHINA PALM OLEIN SEP3 6168 -138.00 6130 6276 548920
CHINA SOYOIL SEP3 7678 -170.00 7654 7798 785948
CBOT SOY OIL MAY3 48.84 -0.39 48.71 49.25 8040
NYMEX CRUDE MAY3 88.54 -2.75 88.05 90.98 57568
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=3.04 ringgit)