Vegoils Malaysian palm oil up on typhoon's possible market impact

by **Cals** Tue 12 Nov 2013, 21:08

Vegoils Malaysian palm oil up on typhoon's possible market impact

Business & Markets 2013

Written by Reuters

Tuesday, 12 November 2013 20:45

12/11/13 19:49:42)

* Prices jump to 2,604 ringgit — highest since Nov 4
* Palm kernel prices soar on fears of coconut oil shortage
* Malaysia Nov 1-10 palm exports fall 10-13 pct -cargo surveyors

KUALA LUMPUR (Nov 12): Malaysian palm oil futures jumped in late trade on Tuesday, on concerns that a super typhoon in the Philippines would tighten supplies of other vegetable oils and shift demand to palm oil-based substitutes, investors said.

Traders said typhoon Haiyan, which wreaked havoc in central Philippines last week, could severely deplete coconut oil supply in the region and channel demand to palm kernel oil.

"Because of what's happening in the Philippines, there's a lot of coconut oil shipments that can't come out," a trader with a foreign commodities brokerage in Malaysia, said.

"Palm kernel oil prices went up sharply, because of coconut oil concerns, and this affected crude palm oil prices. I'm not sure if it's a one-day affair, but technically, the market is strong," the trader added.

Palm kernel prices soared to 3.356.52 ringgit, by Tuesday's close, from 3.191.18 ringgit in the afternoon.

The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange, settled at 2,600 ringgit per tonne — up 2.8 percent on the day, after earlier reaching 2,604 ringgit — the highest since Nov 4.

Total traded volume amounted to 30,466 lots of 25 tonnes each — slightly below the usual 35,000 lots.

Seasonally smaller yields of palm oil in Malaysia and Indonesia, which account for nearly all of the world's supply, have kept the market supported and lifted prices 6.6 percent so far this year — their first such gain since 2010.

Industry data on Monday, showed that Malaysian palm oil output inched up 3.1 percent in October, from September, as monsoon rains dented the harvesting of fresh fruit bunches, with production tapering off, now that the peak season is ending.

But weak exports in early November, could weigh on the market. Palm oil solidifies in cold temperatures, and demand for it typically softens during winter.

Data from cargo surveyors showed exports in the Nov 1-10 period, fell 10 to 13 percent, compared with the month before, as purchases from India and Pakistan dropped.

In other markets, Brent crude futures fell to around $106 a barrel, as investors watched for further signs of easing tension between the United States and Iran, while traders booked profits after steep gains in the previous two sessions.

In competing vegetable oil markets, the U.S. soyoil contract for December rose 1.6 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange, rose 0.5 percent.

Palm, soy and crude oil prices at 1103 GMT
Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	NOV3	2589	+57.00	2540	2589	125
MY PALM OIL	DEC3	2602	+67.00	2506	2602	604
MY PALM OIL	JAN4	2600	+71.00	2506	2604	18687
CHINA PALM OLEIN	MAY4	6226	+8.00	6142	6228	767368
CHINA SOYOIL	MAY4	7188	+36.00	7110	7196	751712
CBOT SOY OIL	DEC3	41.07	+0.65	40.18	41.13	9433
NYMEX CRUDE	DEC3	94.90	-0.24	94.31	95.04	18111

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 = 3.21 Malaysian ringgit)