* Prices up 7.5 pct in August
* Intertek Testing Services to release Aug export data on
* Biodiesel policies to increase local palm consumption
By Chew Yee Kiat
SINGAPORE, Aug 30 Malaysian palm oil futures
eased on Friday as investors booked profits from this week's
rally that was fuelled by forecasts of dry weather in the
soy-producing U.S. Midwest, although healthy demand and a
still-weak ringgit stemmed the decline.
Bullish factors from expectations of lower soy yields to a
weaker ringgit have lifted palm oil this month, sending the
tropical oil to its best monthly performance since December 2010
with a 7.5 percent gain.
Palm oil is a close substitute of soybean oil. A weak
ringgit currency that helps improve margins for overseas buyers
has also supported prices.
Investors also expect August exports to be higher compared
to the prior month's after a 7 percent rise during the first 25
days. Cargo surveyor Intertek Testing Services will release the
full month's export data on Saturday.
"Optimism on August exports capped the downside ... But any
negative surprise on exports will pressure the market once more
as it is still overbought," said a dealer with a foreign
commodities brokerage in Kuala Lumpur.
On Friday, the benchmark November contract on the
Bursa Malaysia Derivatives Exchange lost 1.5 percent to close at
2,404 ringgit ($732) per tonne. Prices traded in a 2,396-2,433
Total traded volume stood at 39,420 lots of 25 tonnes each,
higher than the average 35,000 lots.
Domestic consumption of palm oil in Malaysia, the world's
second-largest producer, could jump on its plans to increase
palm oil's blend in biodiesel to 10 percent from the current 5
percent, a government official said on Friday.
"By July 2014 the whole country will be using B5 ... we are
confident in the very near future we will be moving into B10,"
plantation industries and commodities minister Douglas Uggah
Embas told reporters at a press conference in Kuala Lumpur.
"External demand is beyond our control. But at least
domestically, with policies executed on biodiesel, we can
increase our local consumption," he added.
In other markets, Brent crude oil slipped below $115 a
barrel on Friday as fears over supply disruptions in the Middle
East eased after Britain said it will not join any military
action against Syria.
In vegetable oil markets, the U.S. soyoil contract for
December eased 0.3 percent in late Asian trade. The
most-active January soybean oil contract on the Dalian
Commodities Exchange fell 1.3 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2407 -37.00 2400 2445 178
MY PALM OIL OCT3 2406 -38.00 2398 2432 3705
MY PALM OIL NOV3 2410 -30.00 2396 2433 20494
CHINA PALM OLEIN JAN4 5554 -100.00 5532 5598 546672
CHINA SOYOIL JAN4 7172 -92.00 7154 7214 748472
CBOT SOY OIL DEC3 44.09 -0.11 43.79 44.36 5812
NYMEX CRUDE OCT3 108.00 -0.80 106.75 108.20 30015
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=3.29 Malaysian ringgit)
(Additional reporting by Anuradha Raghu; Editing by Richard
Pullin and Muralikumar Anantharaman)