PALM NEWS MALAYSIAN PALM OIL BOARD Wednesday, 23 Jul 2025

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MARKET DEVELOPMENT
VEGOILS-Palm Oil Hits 3-Week High on China Economic Data
calendar17-04-2014 | linkReuters | Share This Post:

17/04/2014 (Reuters) - Malaysian palm oil futures extended gains to hit their highest in three weeks on Wednesday after better-than-expected economic data from China soothed fears about slowing demand from the world's second-largest consumer of the tropical oil.

China's economy grew an annual 7.4 percent in the first quarter, slower than the 7.7 percent pace in the previous three months but ahead of market expectations of 7.3 percent.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange hit an intraday high of 2,691 ringgit a tonne, its highest since March 27, before standing at 2,685 ringgit ($828) by Wednesday's close, up 1.4 percent.

"The data offers some comfort to investors who have been worrying over Chinese economic slowdown. Going forward, I think the concern is whether prices will able to hold above 2,650 ringgit in a sustainable fashion," said Phillip Futures analyst Tan Chee Tat.

"It hasn't been able to make a convincing breakthrough."

Technicals showed that Malaysian palm oil may extend its gain to 2,703 ringgit per tonne as it has cleared a resistance at 2,653 ringgit, said Reuters market analyst Wang Tao.

But Malaysian palm oil futures, which set the tone for global prices, have gained on strong exports in the first half of April, with the possible return of the dreaded El Nino weather phenomenon offering additional support.

A majority of weather forecasting models indicate that an El Nino weather phenomenon may develop around the middle of the year, but it is too early to assess its likely strength, the U.N. World Meteorological Organization said on Tuesday.

El Nino, characterised by unusually warm surface temperatures in the central and eastern tropical Pacific Ocean, has a significant impact on climate in many parts of the world and a warming influence on global temperatures, the WMO said.

"The immediate impact will be a sharp decline in production," said Tan at Phillip Futures, referring to palm oil output. 

"Long-term wise, the drought will weaken tree structure and affect output in coming years. It will affect supply and contribute to the upside trend in palm oil prices."

In competing vegetable oil markets, the U.S. soyoil contract for May rose 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange added nearly 1 percent.

In other markets, global oil price rose to $110 a barrel on Wednesday, shaking off slower economic growth figures in China, as tensions mounted in Ukraine.

  Palm, soy and crude oil prices at 1007 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY4    2735   +43.00    2703    2737     346
  MY PALM OIL      JUN4    2702   +39.00    2670    2705   11598
  MY PALM OIL      JUL4    2685   +38.00    2655    2691   18744
  CHINA PALM OLEIN SEP4    6212  +116.00    6114    6214  541596
  CHINA SOYOIL     SEP4    7032   +68.00    6962    7034  621422
  CBOT SOY OIL     MAY4   43.17    +0.34   42.54   43.22    5656
  NYMEX CRUDE      MAY4  104.70    +0.95  103.68  104.82   18558

  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 = 3.241 ringgit)
  ($1 = 6.2214 Chinese yuan)