MARKET DEVELOPMENT
Palm Falls to 1-Week Low, Posts Biggest Weekly Drop in Seven
Palm Falls to 1-Week Low, Posts Biggest Weekly Drop in Seven
17/01/2015 (Reuters) - Malaysian palm oil futures fell to their lowest in over a week on Friday as volatile crude oil prices and lacklustre export demand dampened buying interest in the tropical oil, dragging the contract to its biggest weekly drop in seven.
Palm, the world's most traded vegetable oil, has been propped up by monsoon flooding, which dented output and stockpiles in No.2 grower Malaysia, but traders remain wary as global commodity markets are roiled by an oil price rout.
"The ringgit depreciating and floods will bring down output and end-stocks, but you have problems in the world. Demand is not picking up," said a trader with a foreign commodities firm in Kuala Lumpur.
The benchmark April contract was down 1.4 percent to 2,311 ringgit ($650) per tonne to close at their lowest since Jan. 7. It fell 1.6 percent this week, its biggest drop since end-November, after failing to build on three straight weeks of gains.
Traded volume stood at 78,450 lots of 25 tonnes, more than double the typical 35,000 lots.
Market participants say palm has struggled over the past two weeks to get a firm grip above 2,380 ringgit, as concern over dwindling demand from key buyers chased away follow-through buying. The contract hit a six-month high of 2,394 ringgit late on Thursday but dropped as low as 2,298 ringgit on Friday.
Cargo surveyors reported that overseas sales of Malaysian palm products fell between 12 and 13 percent in the first half of January compared to December.
Elsewhere, Indonesian crude palm oil output is estimated to have fallen around 6 percent in December from November, hit by a seasonal downturn in production, a Reuters survey of leading industry officials showed.
Growers in Malaysia's Borneo region are bracing for the impact of monsoon rains that have triggered flooding in some parts of top palm-growing state Sabah.
Malaysia's meteorological department flashed "orange stage" warnings on its website late on Thursday for heavy rain over Sarawak until Jan. 17.
In other markets, Brent crude oil futures rose above $49 a barrel on Friday as the IEA said the tide of recent price slumps may turn, although analysts said a strong rebound anytime soon was unlikely as global output continues to outweigh demand.
In competing vegetable oil markets, the US soyoil contract for March was nearly flat in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange eased 0.1 percent.
Palm, the world's most traded vegetable oil, has been propped up by monsoon flooding, which dented output and stockpiles in No.2 grower Malaysia, but traders remain wary as global commodity markets are roiled by an oil price rout.
"The ringgit depreciating and floods will bring down output and end-stocks, but you have problems in the world. Demand is not picking up," said a trader with a foreign commodities firm in Kuala Lumpur.
The benchmark April contract was down 1.4 percent to 2,311 ringgit ($650) per tonne to close at their lowest since Jan. 7. It fell 1.6 percent this week, its biggest drop since end-November, after failing to build on three straight weeks of gains.
Traded volume stood at 78,450 lots of 25 tonnes, more than double the typical 35,000 lots.
Market participants say palm has struggled over the past two weeks to get a firm grip above 2,380 ringgit, as concern over dwindling demand from key buyers chased away follow-through buying. The contract hit a six-month high of 2,394 ringgit late on Thursday but dropped as low as 2,298 ringgit on Friday.
Cargo surveyors reported that overseas sales of Malaysian palm products fell between 12 and 13 percent in the first half of January compared to December.
Elsewhere, Indonesian crude palm oil output is estimated to have fallen around 6 percent in December from November, hit by a seasonal downturn in production, a Reuters survey of leading industry officials showed.
Growers in Malaysia's Borneo region are bracing for the impact of monsoon rains that have triggered flooding in some parts of top palm-growing state Sabah.
Malaysia's meteorological department flashed "orange stage" warnings on its website late on Thursday for heavy rain over Sarawak until Jan. 17.
In other markets, Brent crude oil futures rose above $49 a barrel on Friday as the IEA said the tide of recent price slumps may turn, although analysts said a strong rebound anytime soon was unlikely as global output continues to outweigh demand.
In competing vegetable oil markets, the US soyoil contract for March was nearly flat in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange eased 0.1 percent.