VEGOILS-Palm oil inches up on improving exports, typhoon concerns

Fri Nov 15, 2013 12:47am EST

Related Topics

* Export demand to pick up as China re-stocks palm oil -
trader
    * Prices on track to post 5th weekly gain in six
    * Palm oil biased to drop to 2,565 ringgit - technicals

    By Anuradha Raghu
    KUALA LUMPUR, Nov 15 (Reuters) - Malaysian palm oil futures
inched up on Friday after export data signalled improving demand
for the tropical oil, while a possible shortage of competing
edible oil supply from the Philippines lifted prices of
palm-based substitutes.
    Exports of Malaysian palm oil products dropped 4.6 percent
in the first half of November, cargo surveyor Intertek Testing
Services said, a slight improvement from shipments in the Nov.
1-10 period which fell a steeper 13 percent. 
    "The exports are not so bad. Towards the second half of the
month, exports should improve further because China will be
buying to replenish their stocks before their Lunar New Year
festival in January," said a trader with a foreign commodities
brokerage. 
    By the midday break, the benchmark January contract 
on the Bursa Malaysia Derivatives Exchange had inched up 0.4
percent to 2,599 ringgit ($812) per tonne, on course for its
fifth weekly gain in six. Prices moved in a tight range between
2,571-2,599 ringgit.  
    Total traded volume stood at 11,519 lots of 25 tonnes each
on Thursday, lower than the average 12,500 lots.         
    Palm oil prices surged this week and is on track to post a
weekly gain of 3.6 percent, fuelled by fears that super typhoon
Haiyan had caused severe damage to coconut crops in the
Philippines, disrupting coconut oil supply from the world's
biggest exporter.
    A shortage of the edible oil would channel demand to palm
oil-based alternatives such as palm kernel oil PKO-MYSTH-M1,
commonly used as a raw material to produce soaps and cosmetics. 
    Trade volumes however are low with investors staying away
from risky bets as they waited for more information on palm oil
production. Output in October rose to 1.97 million tonnes and
market players are expecting November to produce smaller yields.
    "Investors are looking for new leads besides the Philippine
issue. They want to see how the export and production situation
turns out," the Malaysia-based trader added.
    The Malaysian government will also announce its December
crude palm oil export tax later Friday. The No.2 producer has
kept its export duty at 4.5 percent since March.
    Another cargo surveyor Societe Generale de Surveillance will
also release export data for the Nov. 1-15 period late Friday.
       
    Technicals showed that Malaysian palm oil is biased to drop
to its Wednesday low of 2,565 ringgit per tonne, as it has not
completed correction from the Nov. 1 high of 2,632 ringgit, said
Reuters market analyst Wang Tao. 
    In other markets, Brent oil futures held above $108 a barrel
on Friday, heading for its biggest week since early July on
expectations the Federal Reserve will stick with its easy money
policy for now.       
    In competing vegetable oil markets, the U.S. soyoil contract
for December rose 0.4 percent in early Asian trade. The
most active May soybean oil contract on the Dalian
Commodities Exchange rose 0.7 percent.   

  
  Palm, soy and crude oil prices at 0526 GMT
                                                                                           
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV3       0    +0.00       0       0       0
  MY PALM OIL      DEC3    2587    +5.00    2564    2587     572
  MY PALM OIL      JAN4    2599   +10.00    2571    2599    5809
  CHINA PALM OLEIN MAY4    6320   +16.00    6288    6330  451796
  CHINA SOYOIL     MAY4    7306   +54.00    7264    7324  530194
  CBOT SOY OIL     DEC3   41.14    +0.17   40.97   41.21    2200
  NYMEX CRUDE      DEC3   94.19    +0.43   93.84   94.30    3345
                                                                                           
  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 = 3.20 Malaysian ringgit)

 (Editing by Anand Basu)
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