VEGOILS-Palm oil slips as slowing exports weigh

Mon Mar 25, 2013 6:12am EDT

Related Topics

* Malaysia's March 1-25 palm exports down 7 pct -SGS
    * Cyprus's last-ditch deal helps limit losses
    * Stocks may fall to 2.27 million tonnes in April -analyst

 (Updates prices, adds details)
    By Chew Yee Kiat
    SINGAPORE, March 25 (Reuters) - Malaysian palm oil futures
fell on Monday on weaker exports, although losses were limited
as a last-ditch deal to bailout Cyprus supported investor
appetite for riskier assets.
    Cyprus clinched a deal with international lenders for a 10
billion euro ($13 billion) bailout, sending global markets
including crude oil and the euro higher. 
    But palm oil came under pressure as Malaysian exports fell
to 1,055,914 tonnes in the first 25 days of the month, a 7
percent slide compared to the same period last month. 
    Data from cargo surveyors also showed a slowdown of
shipments to major edible oil buyers India, the United States
and the European Union.  
    "We saw a drop in exports to India ... Indian buyers last
month did not book that many shipments for March in advance on
uncertainty of the tax change," said a Singapore-based trader
with a global commodities house.
    Indian buyers avoided booking cargoes for March in advance
as they expected the government to use its budget in late
February to announce a hike in import tariffs, although that did
not materialise.                    
    The benchmark June contract on the Bursa Malaysia
Derivatives Exchange had lost 1.3 percent to 2,460 ringgit
($794) per tonne by Monday's close. Intraday prices touched a
high of 2,505 ringgit, the highest level since Feb. 22, but
failed to rally.
    Total traded volume stood at 35,577 lots of 25 tonnes each,
much higher than the usual 25,000 lots.    
    Leading analyst Dorab Mistry has forecast palm oil futures
could trade between 2,400 and 2,700 ringgit per tonne by the end
of May due to lower stocks and output, an upward revision from
his previous forecast.  
    He also expects Malaysian palm oil stocks to drop below 2
million tonnes in June.            
    "We generally agree with Dorab Mistry's short-term view ...
However, we do not think Malaysia palm oil inventory will reach
2 million tonnes as we believe it should reach the lowest level
of 2.27 million tonnes by April 2013," Alan Lim Seong Chun,
research analyst with Malaysia's Kenanga Investment Bank, said
in a note to clients.
    Palm oil stocks in Malaysia, the world's second-largest palm
producer, stood at 2.44 million tonnes in end-February and
traders are counting on seasonally slower production and healthy
demand to bring stocks down.   
    In other markets, Brent rose above $108 on Monday, as hopes
brightened for a revival in demand after euro zone ministers
approved an EU-IMF plan for restructuring Cyprus's banking
sector, averting a worsening crisis for the region. 
    In other vegetable oil markets, U.S. soyoil for May delivery
 edged down 0.3 percent in late Asian trade. The
most-active September soybean oil contract on the Dalian
Commodities Exchange fell 0.2 percent.
    
  Palm, soy and crude oil prices at 1004 GMT
                                                                                 
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      APR3    2428   -32.00    2425    2456     418
  MY PALM OIL      MAY3    2457   -28.00    2453    2496    5188
  MY PALM OIL      JUN3    2460   -33.00    2459    2505   19049
  CHINA PALM OLEIN SEP3    6416   +10.00    6402    6478  436712
  CHINA SOYOIL     SEP3    8100   -12.00    8084    8144  444946
  CBOT SOY OIL     MAY3   50.27    -0.16   50.21   50.51    3720
  NYMEX CRUDE      MAY3   94.15    +0.44   93.70   94.25   14817
                                                                                 
  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=3.099 ringgit)   

 (Editing by Himani Sarkar)
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.