VEGOILS-Palm oil ends higher on festival demand

SINGAPORE (Reuters): Malaysian palm oil futures edged up on Friday on rising exports ahead of the Muslim fasting month of Ramadan in July, although investors were still cautious on lingering fear over the euro zone debt crisis.

Concern about global growth and a failure by European policymakers to make any significant breakthroughs in resolving the debt crisis have weighed on palm oil this week, which hit its lowest in 2012 on Wednesday.

But firm demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening, lifted palm futures to erase losses and post a 1.1 percent gain this week.

"The market is consolidating after the excellent export numbers on festival buying and most of the negative news has already been priced in," said a trader with a commodities brokerage in Malaysia.

"The market is anticipating a pull-back in the RM3,090 to RM33,13 range in the near term."

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained 2% to close at RM3,130 ($993) per tonne. Prices touched RM2,993 on Wednesday, the lowest in 2012.

Traded volumes stood at 35,239 lots of 25 tonnes each, higher than the usual 25,000 lots.

Palm oil will revisit a low of RM2,993 as a downtrend from RM3,514 has not ended, said Reuters market analyst Wang Tao based on technical analysis.

Cargo surveyor Intertek Testing Services reported a 10.5 percent jump in Malaysian palm oil exports for May 1-25 to 1,146,406 tonnes, compared with just slightly over a million tonnes a month ago.

Another cargo surveyor, Societe Generale de Surveillance, also reported higher exports for the first 25 days of the month.

On the supply side, traders are watching dry U.S weather that could hurt the soybean crop and the possibility of a return of the El Nino weather pattern that could curb palm oil output in Southeast Asia.

Brent crude oil gained on Friday, supported by a lack of progress in nuclear negotiations with Iran, returning to fears over supply if tension over Iran's nuclear programme intensified.

In other vegetable oil markets, the most active U.S. soyoil contract for July climbed 0.9 percent while the most active Dalian soyoil September contract rose 0.2 percent.