Palm oil ends higher
By
BRECORDER REPORT
Malaysian
palm oil futures ended higher on Monday after two days of
losses, as investors pinned hopes for an increase in demand
ahead of a major Muslim festival despite a surprise drop in
exports in the first 20 days of the month.
A weaker Malaysian ringgit,
which fell 0.25 percent to 3.2485 against US dollar in late
trade, also attracted buying interest from overseas buyers
and refiners, lending support to the palm market.
The benchmark July
contract on the Bursa Malaysia Derivatives Exchange closed
0.3 percent higher at 2,640 ringgit ($812) per tonne after
hitting a more than one-week low of 2,612 ringgit in the
afternoon session.
"Exports are not impressive,
but market players are looking forward to the next 10 days,"
said a trader with a foreign commodities brokerage.
"The ringgit also weakened, that's why the market was
higher," the Kuala Lumpur-based trader added.
Exports of Malaysian palm oil
products between April 1-20 fell 5.9 percent from a month
ago to 722,170 tonnes, cargo surveyor Intertek Testing
Services reported, as weaker demand in Europe offset bigger
sales of palm to top buyers India and China.
Another cargo surveyor, Societe Generale de Surveillance,
showed that shipment volumes for the same period fell 6
percent.
Total traded volumes were thin at 25,288 lots of 25 tonnes,
much below the average 35,000 lots, with some currency and
equity markets overseas still closed for the Easter holiday
weekend.
Technicals were bullish.
Malaysian palm oil may rebound to resistance at 2,651
ringgit per tonne as it failed to break support at 2,621
ringgit, said Reuters market analyst Wang Tao.
Market players expect edible oil imports in India, Pakistan
and the Middle East to rise later in April as buyers restock
ahead of the holy month of Ramazan in late June, followed by
Eidul-Fitr celebrations in July.
Traders are also optimistic that output in Malaysia, the
world's No 2 producer, will likely rise only slightly in
April after surging more than 17 percent a month ago.
March's crude palm oil
production had jumped to 1.50 million tonnes, against market
estimates for 1.39 million tonnes.
"Fundamentals are very supportive because production in
Peninsular Malaysia estates is low for the first 15 days of
April," said another Kuala Lumpur-based trader.
"Ramadan demand is keeping nearby availability tight."
In other markets, Brent futures dropped towards $109 a
barrel as investors took profits after steep gains, but
uncertainty surrounding the crisis in Ukraine checked the
decline.
In competing vegetable oil markets, the US soyoil contract
for May slipped 0.7 percent in late Asian trade, while the
most active September soybean oil contract on the Dalian
Commodities Exchange lost 1 percent.
April, 2014
Source:
Business Recorder
