KUALA LUMPUR, Aug 8: Malaysia’s palmoil futures were flat in directionless trade as players waited for new leads to guide the market, traders said on Thursday.

At the close, the benchmark third-month October contract was two ringgit lower at 1,457 ringgit ($383.42) a tonne after trading as low as 1,445 ringgit. It had touched a high of 1,468 ringgit. Overall volume was moderate at 2,093 lots.

Some people are keen on the El Nino report to be issued in the US later today. So, let’s wait and see, said a dealer.

US government weather experts on Thursday will issue a new assessment of this year’s hurricane season due to the arrival of El Nino, a global weather anomaly currently battering Australia.

The weather phenomenon has exacerbated a drought in Australia and Southeast Asia is bracing for a deepening drought.

Traders in Malaysia said the market had discounted news of drought in India and the outcome of Malaysia’s replanting programme.

The market is waiting for August 1-10 palm oil export data due next week.

India, the world’s largest edible oil consumer, said on Thursday drought had affected nearly the entire country and was the worst in more than 15 years.

Traders in Malaysia had hoped India would step up edible oil buying because drought was expected to cut its oilseeds output, but recent data showed only modest increases in its imports.

Some said India and other main buyers such as China and Pakistan were unhappy with current high prices. Others said India had purchased enough edible oils for consumption during the August-November Hindu festival season.

Malaysia said this week it had cut palm oil output by 540,000 tonnes during a recently-concluded replanting programme, but traders said such reduction was meaningless because of a rapid expansion in planting areas in the world’s largest producer.

Traders said prospects of higher local output also dampened sentiment. Private forecaster Ivan Wong estimated August palm oil output to reach 1.05 million tons from around 910,000 tons in July.

In the physical sector, traders said China had purchased around 60,000 tons of RBD palm olein so far this week at $420-$435 a ton C&F.

The CPO contract for both August and September saw closing bids at 1,465 ringgit a ton, against sale offers at 1,470 for southern region. Deals were reported at 1,455 to 1,465 ringgit.

CPO for August/September (central) was offered at 1,470 ringgit against bids of 1,460 ringgit. Deals were reported at 1,460 to 1,465 for August and at 1,460 for central.—Reuters