Palm oil prices down

Published November 1, 2008

JAKARTA, Oct 31: Malaysian palm futures closed down nearly 3 per cent on Friday after crude oil fell on weak US third-quarter economic data that renewed demand worries, traders said.

News of stronger October palm oil exports estimated by two cargo surveyors failed to inspire the market, traders said.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange dropped 45 ringgit, or 2.88 per cent, to 1,515 ringgit ($426) per ton.

Contracts of other traded months fell between 43 ringgit and 60 ringgit. Overall volume was 13,519 lots of 25 tons each.

The key factor pushing down the market is definitely crude oil. People are worried that oil could drop further to $50, meaning that palm will follow suit, said a trader at a Kuala Lumpur-based brokerage firm.

NYMEX crude for December delivery was down $2.56 at $62.40 a barrel in Globex electronic trade by 1031 GMT .

Exports of Malaysian palm oil products for October rose nearly 10 per cent from September to 1,318,196 tons, cargo surveyor Intertek Testing Services said on Friday.

Societe Generale de Surveillance, another cargo surveyor, said on Friday that exports of Malaysian palm oil products rose 5.6 per cent to 1,277,326 tons in October, from 1,209,265 tons shipped in September.

As for exports, even a higher number of 1.4m tons is not going to reduce palm oil stocks much. I think because of that nobody bothers, the same trader said.

In the physical market, Malaysia palm oil for November stood at 1,520/1,530 ringgit per ton in both the southern and central regions. Trades were done at 1,520-1,540 ringgit per ton in the southern region and 1,510-1,530 ringgit a ton in the central region.

In Indonesia, the world’s biggest palm oil producer, trading was slow on Friday.

In Jakarta, the state marketing centre, which sells palm oil from state plantations firms, said it failed to sell palm oil at an auction on Friday.

Producers in Medan — home to Belawan port, Indonesia’s key port for palm oil exports — did not hold an auction Friday.

In Jakarta, refiners sold refined, bleached deodorised (RBD) palm olein, which is used in cooking oil, at 5,100 rupiah (1$0.47), unchanged from Thursday.—Reuters

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