MARKET DEVELOPMENT
11-08-2004
DJ Asian Cash Palm Oil Prices Flat; Malaysian Expo
10/08/04, KUALA LUMPUR (Dow Jones)-- Asian cash palm oil prices weremostly flat Tuesday, with products in Malaysia little changed in slowtrading despite slightly disappointing export figures.Cargo surveyors Intertek Testing Services and SGS (Malaysia) Bhd.issued estimates Tuesday showing Malaysian palm oil exports totaledaround 317,000 tons in the first 10 days of August, up slightly fromabout 300,000 tons in the July 1-10 period.Traders said the figures were considered a disappointment because themarket had been expecting strong growth.However, despite the uninspiring figures, declines in palm oil priceswere limited because many market players had already reacted in advanceMonday.Palm oil prices fell late Monday amid rumors that exports would bearound 320,000 tons and not as high as 400,000 tons as initially expected.Traders said there was also optimism that export growth could pick uppace in the remaining days of the month."The SGS figure showed zero exports to India, which is surprisingbecause they had booked quite a lot of freight space for August. So wewill definitely see a much better number for the second half of themonth," a trader said.India had been buying actively in the Malaysian and Indonesianmarkets last month following concerns about a potential drop in thecountry's domestic oilseeds production because of weather problems.Besides Indian interest, demand from China also improved late lastmonth.So far in August, however, both countries have been less aggressive."When our prices went up, the interest slowed down again. They arestill buying a little bit and that is helping to support our market. Butthe interest is still not as much as what we saw (this time) last year,"a tradersaid.Demand from China and India is typically strong in the third quarteras both countries stock up for major festivals later in the year.Meanwhile, market players largely ignored reports that El Nino weatherconditions have developed and could affect palm oil production in thecoming months.An Australian government weather forecast has indicated that El Ninohas returned and will affect rainfall in Southeast Asia in the next threemonths.Traders said it is still too early to determine the impact, if any, ofEl Nino on palm oil production.In the cash market, CPO for August shipment was offered at 1,480ringgit ($1=MYR3.8) a metric ton, unchanged from Monday, delivered basisin South Malaysia.RBD palm olein for August shipment was offered at $422.50/ton,unchanged from Monday.RBD palm oil for August shipment was at $412.50/ton, down $2.5.In Indonesia, the government sold 2,500 tons of CPO at a semiweeklygovernment auction Tuesday, said an official from PT Perkebunan Nusantara,the agency that sells palm oil from state-run plantations.The official said the auction price was up 8 rupiah ($1=IDR9,185) akilogram from the previous auction.PT Nubika Jaya bought 1,000 tons, ex-factory, at IDR3,641/kg.PT Astra Agro Lestari bought 1,000 tons, free on board Belawan, atIDR3,702/kg.PT Darmex Oil and Fat bought 500 tons, FOB Dumai, at the same price.RBD palm olein in Jakarta was offered at IDR4,300/kg, unchanged fromMonday.Meanwhile, traders said Indonesia palm oil exports in July totaled603,276 tons, up 2.2% from 590,116 tons in June.Traders familiar with estimates from cargo surveyor PT Sucofindo saidvegetable oil exports in July totaled 691,691 tons compared with 668,699tons in June.
