KUALA LUMPUR, Aug 9: Malaysian palm oil futures barely moved on Friday despite private forecaster Ivan Wong revising upward his estimates of July output and stocks.

The benchmark third-month October contract ended down one ringgit at 1,456 ringgit ($383.16) a ton.

Overall volume was a thin 963 lots, down from Thursday’s 2,093 lots.

Wong on Friday estimated Malaysia’s palm oil output in July at 1.0 million tons, up 6.5 per cent from June. He put end-July stocks at 940,000 tons compared with 910,116 at end-June.

Wong, in his previous report, had estimated July production at 965,000 tons and end-month stocks at 905,000 tons.

The upward revision was quite expected, that’s why there was little reaction from the market, said a Kuala Lumpur trader.

Dealers said the increase in July output was related to the departure of 600,000 illegal workers after Malaysia’s amnesty for illegals, mostly Indonesians and Filipinos, expired at midnight on July 31.

The workers harvested a lot of fruits to get some money before they left Malaysia. Fruits which should be harvested in August had been collected in July, said the dealer.

The amnesty programme will affect plantations, which will miss around 400,000 workers. This will put pressure on production in coming months, he added.

Most of the illegal immigrants worked in oil palm plantations in the world’s largest producer.

But another dealer said plantation owners were expected to find new workers soon to make sure they have enough people to harvest the crop regularly.

Plantation owners should have enough money to employ workers legally. You know that production cost is around 800 ringgit per hectare, while palm oil prices are now trading at 1,400 ringgit, said the dealer.

Traders said Monday’s release of export figures from cargo surveyors ITS and SGS for the first 10 days of August should give a flat market fresh direction.

Physical palm oil prices were slightly down despite continued Chinese interest.

August/September crude palm oil for the southern and central zones saw bids at 1,455 ringgit a ton against sale offers at 1,460 ringgit.

Trades were reported at 1,455 to 1,460.

Dealers said the physical sector had been active lately because of persistent covering by main buyers India, China and Pakistan.

One dealer said India, China and Pakistan had respectively bought up to 220,000, 100,000 and 50,000 tons of palm oil so far this week.

Freight bookings to India already reached 240,000 tons for August, China 200,000 tons and Pakistan 140,000 tons. Mediterranean countries also bought close to 60,000 tons of palm oil this week, said the dealer.—Reuters