Palm Futures Lowest in Nearly 4-Month

JAKARTA: Malaysian palm oil futures fell to their lowest close

in four months yesterday, as a drop in the crude oil price dragged down

other vegetable oil markets as well, traders said.

US crude oil

rebounded to above US$70 a barrel yesterday, after hitting its lowest

in more than three months, extending a loss of nearly 18 per cent so far

in May on concerns over Europe’s debts, the weak euro, and swollen US

oil inventories.

“The market will consolidate at RM2,400-2,500

in the next few days unless there’s a major catastrophe, such as falling

crude oil and strengthening US dollar,” said one trader in Kuala

Lumpur.

Palm tends to track energy prices because of its use in biodiesel, which

competes with fossil-based fuels.

“We’ve seen bargain-hunting

coming in, while the support level is likely at RM2,400,” said another

trader in Kuala Lumpur.

The benchmark August crude palm oil

futures on Bursa Malaysia Derivatives Exchange fell 0.9 per cent, or

RM22, to RM2,425 a tonne, its lowest since January 26.

Traded

volume reached 14,915 lots of 25 tonnes each, more than the midday

average of 10,000 lots. Other palm oil contracts fell between 0.81 per

cent to 1.15 per cent.

Exports of Malaysian palm oil products for

May 1-15 jumped 23.1 per cent to 591,887 tonnes, from 480,966 tonnes

shipped between April 1 to 15, cargo surveyor Intertek Testing Services

said on Saturday.

Another cargo surveyor Societe Generale de

Surveillance said yesterday that exports of Malaysian palm oil products

for May 1-15 jumped 23.6 per cent to 620,517 tonnes, in line with the

market’s expectations.

“Exports are quite encouraging this month

and hopefully it will last when demand for the fasting month (Ramadan)

starts soon, and prevent stocks from building up to above 2 million,”

said the second trader.

Crude oil had also dragged on China’s

soyoil market and expectations of record high soybean imports has kept

traders away.

Source : Business Times

Leave a Reply