Palm oil futures up
October 25, 2012: Malaysian palm oil futures inched up on Wednesday as investors bet on increased festival demand for the tropical oil, although prices were locked in a tight range due to lingering concerns over record-high stocks. The upcoming Diwali festival celebrated by major vegetable oil importer India could lead buyers to snap up palm oil, easing a growing stockpile in the world’s No 2 producer.
In addition, cargo surveyor data showing Malaysia’s palm exports grew as much as 17 percent for October 1-20 from a month ago also lifted sentiment. “Exports were good, but inventory is still on the high side,” said a trader with a foreign commodities brokerage in Malaysia.
Palm oil production hits a seasonal peak in the last quarter of the year before slowing, lifting traders’ hopes this will reduce stocks from a record high of 2.5 million tonnes in September. The benchmark January contract on the Bursa Malaysia Derivatives Exchange edged up 1.5 percent to close at 2,578 ringgit ($842) per tonne. Prices traded in a tight range between 2,551 and 2,578 ringgit per tonne.
Total traded volumes stood at 20,953 lots of 25 tonnes each, thinner than the usual 25,000 lots. Technical analysis showed a bullish target for Malaysian palm oil remains unchanged at 2,676 ringgit per tonne, said Reuters market analyst Wang Tao. Palm oil prices are expected to rise sharply in the coming months on brisk buying interest as global importers seek cheaper alternatives to competing soyoil, said Hamburg-based oilseeds analysts Oil World on Tuesday. In other vegetable oil markets, US soyoil for December delivery inched up 0.6 percent in late Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.1 percent higher.