Palm oil firms on export prospects, typhoon concerns

by **Cals** Sun 17 Nov 2013, 21:42

Published: Saturday November 16, 2013 MYT 6:58:00 AM
Updated: Saturday November 16, 2013 MYT 7:00:47 AM
Palm oil firms on export prospects, typhoon concerns

KUALA LUMPUR/SINGAPORE: Malaysian palm oil rose Friday, gaining for five out of six weeks as data from India and Malaysia showed improving demand, while a possible shortage of competing edible oil from the Philippines lifted prices of palm-based substitutes.
India's palm oil imports rose 21.4 percent in October from
the month before as strong demand in the festival season and low
domestic supply boosted purchases.
"Towards the second half of the month, exports should
improve further because China will be buying to replenish their
stocks before their Lunar New Year festival in January," said a
trader with a foreign commodities brokerage.
Exports of Malaysian palm oil products dropped 4.6 percent
in the first half of November, cargo surveyor Intertek Testing
Services said, a slight improvement from shipments in the Nov.
1-10 period which fell a steeper 13 percent.
Another cargo surveyor Societe Generale de Surveillance said
exports during the period fell 8.2 percent to 734,476 tonnes
from 799,853 tonnes shipped during Oct. 1-15.
The benchmark January contract on the Bursa
Malaysia Derivatives Exchange closed up 0.9 percent at 2,609
ringgit ($815) per tonne. Total traded volume stood at 43,636
lots of 25 tonnes each.
Palm oil prices have risen 4 percent this week, fuelled by
fears that super typhoon Haiyan had caused severe damage to
coconut crops in the Philippines, disrupting coconut oil supply
from the world's biggest exporter.
A shortage of the edible oil would channel demand to palm
oil-based alternatives such as palm kernel oil ,
commonly used as a raw material to produce soaps and cosmetics.
Trade volumes however are low with investors staying away
from risky bets as they waited for more information on palm oil
production. Output in October rose to 1.97 million tonnes and
market players are expecting November to produce smaller yields.
"Investors are looking for new leads besides the Philippine
issue. They want to see how the export and production situation
turns out," the Malaysia-based trader added.
Malaysia has set its crude palm oil export tax for December
at 5.0 percent, a government circular showed on Friday. The rate
had been left unchanged at 4.5 percent since March.
"If the tax goes up it should restrict exports," said a
Kuala Lumpur-based trader. "But the fact is that supply is
getting very tight, so I don't think the price will go down."
In other markets, brent oil held above $108 a barrel,
heading for its biggest weekly gain since early July on
expectations the Federal Reserve will stick with its easy money
policy for now.
In competing vegetable oil markets, the U.S. soyoil contract
for December rose 0.6 percent at 0958 GMT, while the most
active May soybean oil contract on the Dalian
Commodities Exchange finished marginally higher.
($1 = 3.20 Malaysian ringgit)

Palm, soy and crude oil prices at 1027 GMT

Contract Month Last Change Low High Volume
M'ASIA PALM OIL NOV3 0 +0.00 0 0 0
M'ASIA PALM OIL DEC3 2618 +36.00 2564 2618 847
M'ASIA PALM OIL JAN4 2609 +20.00 2571 2620 16955
M'ASIA PALM OIL FEB4 2610 +19.00 2573 2620 10786
DALIAN SOY OIL MAY4 7256 +4.00 7250 7324 947296
CBOT SOY OIL DEC3 41.21 +0.24 40.97 41.32 4783
NYMEX CRUDE DEC3 93.83 +0.07 93.74 94.30 11960

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel- Reuters