<![CDATA[CRUDE palm oil futures fell yesterday on fears that palm stocks in the world's number 2 producer may rise to a previous record above 2 million tonnes after climbing faster than expected in October, traders said.
The selling pressure was partly mitigated by cargo surveyors’ estimates of a jump in palm oil exports of up to 22 per cent in the first ten days of November.
Traders said that if export growth could be sustained during the rest of the month and production started to ease after a 27.4 per cent surge in October, then the risk of stocks hitting a previous record level of 2.3 million tonnes, set in November 2008, could be avoided.
“Actually we were early expecting stocks to build up in November but I don’t know (if) it will happen since exports were supportive in the first ten days,” said a trader at a Kuala Lumpur-based commodities brokerage.
“There was some talk it (exports) will be good in the full month but I am not sure yet. We have to see in the next five to 10 days,” the trader added.
The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange dropped RM24 to RM2,242 per tonne, after going as high as RM2,285. Overall volume was 11,963 lots of 25 tonnes each.
The palm price has shown some resilience in recent weeks despite bearish fundamentals, partly supported by strength in other commodities led by crude oil.
Malaysia October palm oil stocks jumped 25 per cent to a 10-month high of 1,974,462 tonnes, from a revised 1,579,252 tonnes in September, the Malaysian Palm Oil Board said yesterday.
October’s surge beat market forecasts for a 15.3 per cent rise to 1.82 million tonnes in a Reuters poll issued last week.
In the physical market, palm oil for November delivery was traded at RM2,165-RM2,170 per tonne in the southern region and at RM2,150-RM2,165 in the central region.
Source : Business Times