MALAYSIAN crude palm oil futures ended 1.3 per cent lower
yesterday as a new US proposal to limit financial risk taking took commodities across the board lower but traders say the market was likely to recover next week.
Palm oil prices have lost nearly 8 per cent so far this year, with much of the losses made this week due to high stocks, slowing exports and China’s moves to tighten credit.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled down RM33 to RM2,455 a tonne.
Traded volumes nearly doubled to 18,676 lots of 25 tonnes each from the usual 10,000 lots.
“The declines in palm oil and other vegetable oil markets were just a reaction but should be a recovery next week as the market is still oversold,” a trader with a foreign commodities brokerage said.
Domestic fundamentals in Malaysia, the world’s No. 2 palm l supplier after Indonesia, may not help the recovery, some traders say.
Malaysia’s December stocks rose to 13-month high as plantations in Indonesia shipped in cargoes to escape an export tax that falls in January.
Export growth has slowed in the first 20 days of January. Key palm oil buyer China has slowed purchases ahead of the Lunar New Year as port stocks are above 350,000-400,000 tonnes after heavy buying in the last two months of 2009, Asian vegetable oil traders said yesterday.
Source : Business Times