MARKET DEVELOPMENT
VEGOILS-Palm Oil Drops to Weakest in 5 Weeks as Demand Wanes
VEGOILS-Palm Oil Drops to Weakest in 5 Weeks as Demand Wanes
(Update prices and milestone)
* Prices fall to 2,170 ringgit, lowest since Dec. 23
* Malaysia's Jan 1-25 palm oil exports fall nearly 20 pct m/m - cargo surveyors
* Malaysian palm output seen down 24 pct in Jan. 1-20
* Palm oil to hover above 2,211 ringgit-technicals
27/01/2015 (Reuters) - Malaysian palm oil futures fell for a third session on Monday, dropping to their lowest in nearly five weeks as poor demand from major buyers sparked concern that palm's use in food and fuel industries may continue to slump in coming months.
Palm prices ran up 14 percent from December to a six-month high of 2,394 ringgit by Jan. 15 after monsoon flooding wreaked havoc in parts of Malaysia, the second-biggest grower, inundating estates and destroying infrastructure.
But market players say worries about the devastation have cooled, and even if growers expect another big drop in output this month, waning export demand from India, China and Europe plus the rout in crude oil could offset that.
"Production is down temporarily, but soon it will rise again, and people are worried about how demand will be, with the poor economic growth," said a trader with a foreign commodities firm in Kuala Lumpur.
"We don't know whether China will buy equal or less amounts of edible oil from last year. Biofuel demand is bad, biodiesel operators can't do anything," the trader added. "These are the two main concerns keeping prices under pressure."
The benchmark April contract had dropped 2.5 percent to 2,175 ringgit ($601) per tonne by Monday's close, after touching 2,170 ringgit in late trade, the lowest since Dec. 23.
Malaysian exports of palm oil products fell 17.7 percent to 886,189 tonnes between Jan. 1-25 from the same period a month before, according to cargo surveyor Intertek Testing Services.
Another cargo surveyor, Societe Generale de Surveillance, reported that exports for the same period slid 19 percent.
The Malaysian Palm Oil Association, a growers' group, estimates crude palm oil production fell 24.3 percent between Jan. 1 and 20. Output from Sarawak alone, Malaysia's second-largest palm-growing state, was forecast to have dropped more than 28 percent in the same period.
Oil prices declined on Monday, with U.S. crude falling close to a nearly six-year low, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.
In other vegetable oil markets, the U.S. soyoil contract for March fell 1.1 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 1.0 percent.
Palm, soy and crude oil prices at 1026 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB5 2200 -64.00 2200 2254 574
MY PALM OIL MAR5 2187 -60.00 2186 2249 2860
MY PALM OIL APR5 2175 -55.00 2170 2222 26233
CHINA PALM OLEIN MAY5 4838 -30.00 4836 4874 247708
CHINA SOYOIL MAY5 5510 -56.00 5506 5562 315804
CBOT SOY OIL MAR5 31.26 -3.50 31.26 31.57 7278
INDIA PALM OIL JAN5 434.90 -3.50 434.00 439.50 488
INDIA SOYOIL FEB5 616.00 -9.00 615.70 624.80 50145
NYMEX CRUDE MAR5 45.04 -0.55 44.35 45.35 47107
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.6170 Malaysian ringgit)
($1 = 6.2542 Chinese yuan)
($1 = 61.42 Indian rupee)
* Prices fall to 2,170 ringgit, lowest since Dec. 23
* Malaysia's Jan 1-25 palm oil exports fall nearly 20 pct m/m - cargo surveyors
* Malaysian palm output seen down 24 pct in Jan. 1-20
* Palm oil to hover above 2,211 ringgit-technicals
27/01/2015 (Reuters) - Malaysian palm oil futures fell for a third session on Monday, dropping to their lowest in nearly five weeks as poor demand from major buyers sparked concern that palm's use in food and fuel industries may continue to slump in coming months.
Palm prices ran up 14 percent from December to a six-month high of 2,394 ringgit by Jan. 15 after monsoon flooding wreaked havoc in parts of Malaysia, the second-biggest grower, inundating estates and destroying infrastructure.
But market players say worries about the devastation have cooled, and even if growers expect another big drop in output this month, waning export demand from India, China and Europe plus the rout in crude oil could offset that.
"Production is down temporarily, but soon it will rise again, and people are worried about how demand will be, with the poor economic growth," said a trader with a foreign commodities firm in Kuala Lumpur.
"We don't know whether China will buy equal or less amounts of edible oil from last year. Biofuel demand is bad, biodiesel operators can't do anything," the trader added. "These are the two main concerns keeping prices under pressure."
The benchmark April contract had dropped 2.5 percent to 2,175 ringgit ($601) per tonne by Monday's close, after touching 2,170 ringgit in late trade, the lowest since Dec. 23.
Malaysian exports of palm oil products fell 17.7 percent to 886,189 tonnes between Jan. 1-25 from the same period a month before, according to cargo surveyor Intertek Testing Services.
Another cargo surveyor, Societe Generale de Surveillance, reported that exports for the same period slid 19 percent.
The Malaysian Palm Oil Association, a growers' group, estimates crude palm oil production fell 24.3 percent between Jan. 1 and 20. Output from Sarawak alone, Malaysia's second-largest palm-growing state, was forecast to have dropped more than 28 percent in the same period.
Oil prices declined on Monday, with U.S. crude falling close to a nearly six-year low, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.
In other vegetable oil markets, the U.S. soyoil contract for March fell 1.1 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 1.0 percent.
Palm, soy and crude oil prices at 1026 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB5 2200 -64.00 2200 2254 574
MY PALM OIL MAR5 2187 -60.00 2186 2249 2860
MY PALM OIL APR5 2175 -55.00 2170 2222 26233
CHINA PALM OLEIN MAY5 4838 -30.00 4836 4874 247708
CHINA SOYOIL MAY5 5510 -56.00 5506 5562 315804
CBOT SOY OIL MAR5 31.26 -3.50 31.26 31.57 7278
INDIA PALM OIL JAN5 434.90 -3.50 434.00 439.50 488
INDIA SOYOIL FEB5 616.00 -9.00 615.70 624.80 50145
NYMEX CRUDE MAR5 45.04 -0.55 44.35 45.35 47107
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.6170 Malaysian ringgit)
($1 = 6.2542 Chinese yuan)
($1 = 61.42 Indian rupee)