Palm oil prices shoot up by 4pc

Published August 15, 2008

KUALA LUMPUR, Aug 14: Malaysian crude palm oil futures soared as much as 4.2 per cent on Thursday, recovering from 10-month lows as gains in crude oil seeped into vegetable oils markets, dealers said.

But palm oil prices, which have slipped more than 13 per cent this year and are down more than 41 per cent from their March peak, may struggle to test the 2,700 ringgit level as rising exports may not soak up palm stocks, dealers said.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose as high as 108 ringgit or 4.2 per cent to 2,656 ringgit ($798) per metric ton. The contract then settled up 72 ringgit at 2,620 ringgit.

“Vegetable oil markets were lifted up by gains in crude oil.

But other than that, it is bearish because we have very good ending stocks and production is picking up,” said a dealer in a local brokerage.

He added: “Everybody is now waiting for the export number because it’s the only one that can pull the market higher.” Contracts for other traded months rose between 41 and 84 ringgit.

Overall volume shot up to 14,088 lots of 25 tons each from the usual 10,000 lots.

Cargo surveyor Intertek Testing Services and Societe General de Surveillance will unveil estimates for Aug 1-20 on Friday.

The most-active January 2009 soyoil contract on China’s Dalian Commodity Exchange rose 2.1 per cent but September soyoil at the Chicago Board of Trade fell 0.4 percent during Asia trading.

India’s edible oil imports fell 3 per cent in July from a year earlier, but are on course to remain in the range of 550,000-600,000 tons a month for the remaining three months of the oil year, a trade body said on Wednesday.

Indonesian palm oil prices rebounded on Thursday, tracking the Malaysian market. In Jakarta, the state marketing centre sold crude palm oil at 6,822 rupiah ($0.743) a kg, up slightly from 6,814 rupiah a kg on Wednesday.

Palm oil producers in North Sumatra’s Medan — home to Belawan port, which is the key port for palm oil exports -- sold crude palm oil at 6,720-6,730 rupiah a kg, little changed from 6,740-6,850 rupiah a kg on Wednesday. Refiners in Jakarta offered RBD palm olein, used as cooking oil, at 7,450 rupiah a kg, up from 7,400 rupiah a kg on Wednesday, on Malaysia and improving demand.

“Demand from food makers have started to trickle in,” said a dealer in a refinery in Jakarta.

In the physical market in Malaysia, crude palm oil for delivery in August stood at 2,630/2,655 ringgit a ton in south region. Trades were done at 2,620-2,650 ringgit a ton.—Reuters

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