VEGOILS-Palm slips on weak soy, crude; hopes for weaker output supports
(Updates prices, adds SGS export data and paragraph on Indian import taxes)
* Malaysia's Oct. 1-25 palm oil exports fall 11-12 pct -cargo surveyors
* Palm oil to fall into 2,132-2,149 ringgit range -technicals
* India considers raising import taxes on vegetable oils -sources
By Anuradha Raghu
KUALA LUMPUR, Oct 27 (Reuters) - Malaysian palm oil futures edged down on
Monday, slipping off a two-week high as losses in overnight soy markets as well
as weak crude prices weighed, although optimism that wet weather could cap
output in the world's top palm growers provided support.
Export demand for Malaysian palm oil held steady, but was still down 11.2
percent for Oct. 1-25 period compared with a month ago, according to data from
cargo surveyor Intertek Testing Services. Another cargo surveyor Societe
Generale de Surveillance showed exports for the same period fell 11.7 percent.
"The weakness in U.S. soybean oil on Friday night, as well as today's Dalian
pushed the palm market lower," said a trader with a foreign commodities
brokerage in Kuala Lumpur.
"But overall, the supportive tone is still prevailing in the market. Now,
people are waiting for a clearer picture on October production," the trader
added. "Prices are range-trading between 2,150-2,240 ringgit."
The benchmark January contract on the Bursa Malaysia Derivatives
Exchange ended down 0.7 percent at 2,165 ringgit ($661) per tonne. Palm posted
last week its biggest weekly gain in four with a rise of 1.8 percent.
Total traded volume stood at 30,455 lots of 25 tonnes, below the usual
35,000 lots.
Benchmark prices were trapped in a tight range of 2,164 ringgit to 2,176
ringgit as investors waited for more direction and avoided risky bets ahead of a
two-day palm oil conference in Kuala Lumpur from Tuesday.
Technicals, however, showed palm may drop into a range of 2,132-2,149 ringgit
per tonne, as a correction from the Oct. 1 high of 2,223 ringgit could have
extended, said Reuters market analyst Wang Tao.
The rainy monsoon season, which affects top oil palm producers Indonesia and
Malaysia and is marked by frequent thunderstorms, is expected to begin in early
or mid-November and stretch out into late December.
The heavy rains typically cause flooding which can delay harvesting and
transportation of palm fruit. Market players are looking to the expected fall in
output to eat into Malaysian stockpiles of the tropical oil that stood at 2.09
million tonnes as of September end.
But palm prices could be pressured if India, the world's top edible oil
consumer, raises import taxes on vegetable oils.
India is considering raising the import taxes on crude and refined vegetable
oils by more than 5 percent to protect local farmers and the refining industry,
two government sources said on Monday, as purchases by the world's top importer
are expected hit a record this year.
In competing vegetable oil markets tracked by palm, the U.S. soyoil contract
for December fell 0.5 percent in late Asian trade, while the most active
January soybean oil contract on the Dalian Commodities Exchange shed
1.6 percent.
In other markets, Brent crude oil fell below $86 a barrel on Monday after
Goldman Sachs slashed its price forecasts, citing abundant supply and lacklustre
demand despite a pickup in global economic growth.
Palm oil typically competes with the energy market for its increasing use as
a renewable fuel.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2188 -11.00 2182 2196 1069
MY PALM OIL DEC4 2173 -10.00 2168 2180 6465
MY PALM OIL JAN5 2165 -16.00 2164 2176 13200
CHINA PALM OLEIN JAN5 5140 -42.00 5120 5180 289706
CHINA SOYOIL JAN5 5744 -96.00 5738 5780 241598
CBOT SOY OIL DEC4 32.23 -1.90 32.20 32.33 1861
INDIA PALM OIL OCT4 441.90 -1.90 440.90 443.90 638
#VALUE!
NYMEX CRUDE DEC4 80.74 -0.27 80.70 81.29 18023
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(1 US dollar = 3.275 Malaysian ringgit)
(1 US dollar = 6.1167 Chinese yuan)
(1 US dollar = 61.32 Indian rupee)
(Editing by Prateek Chatterjee)
