VEGOILS-Strong exports, prospect of lower output lift palm to 6-week high
(Updates prices, adds SGS export data, adds expectations of
Globoil conference)
* Prices touch 2,207 ringgit late Thursday, highest since
Aug. 11
* Malaysia's Sept. 1-25 palm oil exports rise 30-35 pct -ITS
* Palm oil export battle to dominate India conference
By Anuradha Raghu
KUALA LUMPUR, Sept 25 (Reuters) - Malaysian palm oil futures
stretched gains into a third day on Thursday to touch their
highest in more than six weeks, buoyed by robust demand and
expectations that output would drop this month.
Market players said that firm export demand, coupled with
weaker palm yields in September, would prevent another big rise
in inventories in the top palm-growing countries.
In August, Malaysia's stocks surged 22 percent from July to
2.05 million tonnes.
Exports of Malaysian palm oil products rose 29.6 percent to
1,278,703 tonnes between Sept. 1-25 compared with the same
period a month before, cargo surveyor Intertek Testing Services
reported. Another surveyor Societe Generale de Surveillance said
exports for the same period rose 34.6 percent.
Shipments to India, China and Europe - key buyers of palm
oil - were stronger than in August, while total exports of crude
palm oil for the period were nearly double from a month ago.
"Why not?" said a trader with a foreign commodities
brokerage in Kuala Lumpur, asked about a potential jump in
export demand.
"You have no tax on crude palm oil, cheap palm prices ...
The timing is good. People are rushing to buy. India will have
Deepavali and in a few months China will celebrate Lunar New
Year."
The benchmark December contract on the Bursa
Malaysia Derivatives Exchange climbed to 2,207 ringgit in late
Thursday trade, the highest since Aug. 11, before settling at
2,198 ringgit ($676) per tonne by the day's close, a 2 percent
gain.
Total traded volume stood at 47,528 lots of 25 tonnes each,
above the usual 35,000 lots.
Some investors, however, say palm prices could be overbought
and expect a correction to kick in.
"The supportive tone will prevail till tomorrow or the
weekend," said a second palm trader in Kuala Lumpur. "However, a
quick fall or retracement is very likely due to the overbought
scenario in the intraday chart."
The Malaysian Palm Oil Association forecast palm oil
production fell about 12 percent between Sept. 1-20, led by a
drop in output in peninsular Malaysia.
Investors will also be watching for trading hints from
Globoil India, a three-day conference from Sept. 26-28, where
leading vegetable oil analysts and industry players will deliver
their outlook on vegetable oil prices and global demand.
Industry players said competing efforts by top palm oil
producers Indonesia and Malaysia to raise exports of the
tropical oil, and the impact of falling crude oil prices on
biodiesel demand will be the primary focus of the conference.
In competing vegetable oil markets, the U.S. soyoil contract
for December rose 1.1 percent in late Asian trade, while
the most active January soybean oil contract on the
Dalian Commodities Exchange gained 1.7 percent.
In other markets, Brent crude oil slipped further below $97
a barrel on Thursday as plentiful supply and a strong U.S.
dollar outweighed concerns about potential loss of supply as a
result of conflict in the Middle East.
Palm, soy and crude oil prices at 1016 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT4 2205 +27.00 2180 2211 975
MY PALM OIL NOV4 2203 +44.00 2170 2210 5870
MY PALM OIL DEC4 2198 +44.00 2164 2207 23605
CHINA PALM OLEIN JAN5 5250 +106.00 5164 5268 891632
CHINA SOYOIL JAN5 5970 +98.00 5930 5984 512468
CBOT SOY OIL DEC4 33.09 +5.90 32.76 33.18 7511
INDIA PALM OIL SEP4 471.40 +5.90 466.70 472.40 427
INDIA SOYOIL OCT4 618.20 +6.00 614.50 620.50 63595
NYMEX CRUDE NOV4 92.72 -0.08 92.51 92.99 15470
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 = 3.252 Malaysian ringgit)
($1 = 6.1363 Chinese yuan)
($1 = 61.16 Indian rupees)
(Editing by Alan Raybould and Anand Basu)
