Palm oil lower
September 25, 2013
Malaysian palm oil futures reversed early gains to end down on Tuesday amid forecasts that competing oilseed supplies would soon flood the market, although a weak ringgit checked losses. The ringgit eased 0.3 percent against the dollar in late trade, helping keep palm oil in a tight range between 2,291 ringgit and 2,329 ringgit and improving margins for overseas buyers.
“Last week the ringgit appreciated a little too much. Now we’re expecting the ringgit to weaken and that will be supportive of the market,” said a trader with a foreign commodities brokerage in Kuala Lumpur. “Food industries and some other end-consumers are very under-covered, so whenever prices dip a bit they will take the opportunity to come in and buy,” the trader added. By Tuesday’s close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had edged down 0.4 percent to 2,300 ringgit ($715) per tonne, slightly below the midday break’s 2,333 ringgit.
Palm oil had dropped to the weakest since August 14 at 2,279 ringgit on Monday, hurt by projections for higher global edible oil supply that could drag down palm oil prices to new lows in 2014. The trader said he expects prices to stay within a range of 2,250-2,400 ringgit “because we don’t have any new factors to move the market much lower or higher”.
Total traded volumes stood at 24,678 lots of 25 tonnes each, below the average 35,000 lots. Palm oil has shed nearly 6 percent this year, extending losses from a 23.2 percent fall suffered in 2012 – palm’s worst annual performance since the global financial crisis in 2008. Edible oil imports of world’s No 1 buyer India could rise 4 percent to a record 10.7 million tonnes in 2013/14 due to growth in consumption, with the entire rise coming from refined palm oil, a leading trade expert told the Globoil Conference in India last weekend.
Market players will be watching for Malaysia’s export data for the September 1-25 period, due to be released on Wednesday by cargo surveyors. Exports in the first 20 days rose between 9-13 percent. In vegetable oil markets, the US soyaoil contract for December was flat in late Asian trade. The most-active January soyabean oil contract on the Dalian Commodities Exchange rose 0.9 percent. Courtesy Reuters
Published in ZaraiMedia.com