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Today's Paper | December 05, 2024

Published 23 Dec, 2008 12:00am

Palm oil prices higher

KUALA LUMPUR, Dec 22: Malaysian crude palm oil futures rose 3.4 per cent on Monday as crude oil earlier clawed back some of its losses, lifting vegetable oil markets from China to the United States.

Strong export data from a cargo surveyor also supported investor sentiment although most traders said the surge in palm oil shipments for the month had been factored in.

The market has been staying above 1,500 ringgit because of the good exports, discounting the swings in crude, said a trader with a foreign commodities brokerage.

Prices of the vegetable oil have tumbled about two-thirds from March’s 4,486 ringgit peak. But recently, palm oil has been holding above 1,500 ringgit key level due to surging exports and flood fears in main producing areas in Malaysia.

End-November stocks in Malaysia, the world’s second biggest producer, reached a record high of 2.27 million tons.

Exports for Dec 1-20 jumped 31.4 per cent to 1.098 million tons, according to cargo surveyor Intertek Testing Services, but traders say shipments need to reach 1.5-1.6 million tons for at least the next 2-3 months. Another cargo surveyor, Societe Generale de Surveillance, reported a 31.5 per cent jump to 1,110,753 tons in the same period.

Vegetable oil markets move in tandem with crude oil as soyaoil and rapeseed oil is heavily subsidised as a feedstock for biodiesel, which competes directly with petroleum diesel.

In Indonesia, the world’s largest palm producer, the Jakarta-based state marketing centre said it only sold 500 tons out of 2,500 tons of palm oil it offered in an auction at 5,394 rupiah ($0.49 rupiah) per kg.

The centre, which normally sells palm oil from state plantations, did not hold a palm oil auction on Friday due to lack of stocks.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports -- did not hold palm oil auction on Monday.

Refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at about 5,750 rupiah per kg compared to 5,700-,5750 rupiah per kg on Friday.—Reuters

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