July 20, 2002	Saturday	Jamadi-ul-Awwal 9, 1423

KUALA LUMPUR, July 19: Malaysia’s palm oil futures ended higher across the board on Friday, led by weekend short covering and optimistic crop estimates for July, traders said.

The new benchmark third-month futures, October, was 38 ringgit higher at 1,447 ringgit ($380.79) a ton after trading as high as 1,450 ringgit.

Overall volume was heavy at 4,016 lots.

Private forecaster Ivan Wong said July’s palm oil output will show a modest increase of three per cent to 970,000-975,000 tons compared with June.

He forecast end-July stocks at 910,000-920,000 tons, almost unchanged from June’s 910,000 tons, while exports for this month were estimated at 850,000-855,000 tons, down from 876,000 tons in June.

Wong’s data sparked heavy covering and plucked October contract from a low of 1,408 ringgit. Trading had been slow by midday after CBOT soy futures fell sharply in early Asian screen trade due to forecasts of scattered rains in the US Midwest.

Some traders said Pakistan, one of Malaysia’s main buyers, was expected to boost imports after the country’s cooking oil processing units called off a one-day-old strike on Thursday as the government agreed to accept most of their demands.

The government had agreed not to apply a controversial provision of the sales tax law on cooking oil units, withdraw one per cent surcharge on industrial importers of cooking oil and adjust a three per cent witholding tax against their actual income.

Pakistani units annually process 1.6 million tons of edible oil, most of which is imported from Malaysia.

Their edible oils stocks are low at around 70,000 tons. I expect Pakistan to import at least 300,000 tons of palm oil in August-September, said one trader.

Pakistani importers, he said, were likely to buy more palm oil because soyoil was much higher at $465 a ton C&F for August shipment compared with $420 for palm oil.

Today, we were booked to ship 12,000 tons of palm oil to Pakistan and another 8,000 tons to India, said the trader, referring to the world’s largest edible oil importer. The short-term outlook seems bullish, he added.

At the physical market, CPO’s July and August contracts saw bids at 1,450 ringgit a ton in the southern as well as as central regions against sale offers at 1,455 ringgit.

Trade was reported at 1,435 to 1,450 ringgit for both sides.—Reuters