VEGOILS-Palm oil closes lower on demand concerns

Wed Nov 21, 2012 5:27am EST

Related Topics

* Malaysia Nov. 1-20 exports down 3.8 pct m/m to 1.01 mln T
-SGS
    * Chinese demand rises, but exports to India, Europe drop

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Nov 21 (Reuters) - Malaysian palm oil futures
eased on Wednesday, inching down for a second straight session
as lacklustre export data fuelled traders' concerns over a
slowdown in demand.      
    Malaysian palm exports for Nov. 1-20 fell 3.3 percent to
1.02 million tonnes from a month ago, cargo surveyor Intertek
Testing Services said on Tuesday. Another surveyor, Societe
Generale de Surveillance, reported a drop of 3.8 percent in
shipments for the same period.  
    Although Chinese demand continued to grow on festival buying
ahead of the Lunar New Year and as buyers stocked up before
stricter quality measures take effect in 2013, palm oil prices
were weighed down by much weaker Malaysian shipments to Europe
and India. 
    "The market is fundamentally bearish and prices will further
correct before positive sentiment enters the market," said a
trader with a Malaysian commodities brokerage.
    "A correction towards 2,350 to 2,400 ringgit per tonne
should be healthy for both consumers and packers."
    The benchmark February contract on the Bursa
Malaysia Derivatives Exchange fell 0.6 percent to close at 2,443
ringgit ($798) per tonne. Prices on Tuesday had risen to 2,485
ringgit, the highest since Nov. 2.
    Total traded volumes surged to 29,018 lots of 25 tonnes
each, compared to the usual 25,000 lots.    
    European demand for palm oil could take a further hit after
international lenders failed for a second week running to agree
on how to get Greece's debt down to a sustainable level,
suggesting the debt crisis could still drag on. 
    However, in a bullish sign for palm oil, Brent crude rose
above $110 a barrel on Wednesday, supported by fears of supply
disruption from the Middle East, as clashes raged between
Palestinians and Israelis despite overnight truce talks. 
    In other vegetable oil markets, U.S. soyoil for December
delivery fell 0.3 percent in late Asian trade. The most
active May 2013 soybean oil contract on the Dalian
Commodity Exchange closed 0.8 percent higher. 
    Traders also noted news on Olam International Limited
, a Singapore commodities trader. 
    Muddy Waters stepped up its battle against Olam with a
letter criticising the firm's debt and cash burn. But Olam
shares rebounded on Wednesday, in a sign that investors were
relieved that Muddy Waters had yet to publish a long, detailed
report on the company as it has with other targets. 
         
  Palm, soy and crude oil prices at 1002 GMT
                                                                    
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC2    2340   -29.00    2338    2360     552
  MY PALM OIL      JAN3    2402   -24.00    2394    2426    6728
  MY PALM OIL      FEB3    2443   -14.00    2427    2460   14038
  CHINA PALM OLEIN MAY3    6782   +24.00    6734    6798  455950
  CHINA SOYOIL     MAY3    8538   +64.00    8484    8548  644404
  CBOT SOY OIL     DEC2   48.20    -0.12   47.85   48.39    5876
  NYMEX CRUDE      JAN3   87.21    +0.47   86.65   87.40   32446
                                                                    
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
 ($1=3.07 ringgit)

 (Editing by Himani Sarkar)
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