Asian palm oil markets at top end of range
Asian palm oil markets at top end of range
KUALA LUMPUR (Reuter): Asian palm oil markets are seen trading
firm this week, though demand may begin to dry up as the price of
Malaysia's benchmark July futures heads up towards closer to
1,300 ringgit a ton, regional traders said.
"It's at the top end of the range," a senior Singapore dealer
for a U.S. commodity company said, adding July contract will
likely inch up to around 1,295 a ringgit a ton.
Some traders in Kuala Lumpur said the July contract's support
level is 1,280 ringgit. On Friday, the contract closed at 1,290
ringgit a ton.
"I think palm will remain firm this week due to strong
interest from refiners in Malaysia," a Singapore dealer for a
European trading house said.
Traders in Kuala Lumpur said there was shortcovering from
refiners on expectation of tight supplies in the near term.
Malaysian physical prices were firmer in recent days with
refiners seen covering their positions to meet earlier
commitments.
Traders in Singapore said the firm tone of the market should
continue, but the rise may eventually discourage buyers. "I think
the prices are beginning to deter some buyers," a Singapore
dealer said.
A Malaysia trader added: "If the market surges further this
week, it will be more expensive for consumers to buy palm than
other edible oil."
Malaysia's output is expected to rise in coming months as the
peak production period is arriving, traders said. Palm normally
peaks at October/November.
In Indonesia, prices will be steady with buying interest
remaining modest.
"I think prices will be hovering around current levels this
week," an Indonesian trader said. "There has not been much local
support because of the ongoing general election campaign."
Players had generally been cautious, keeping stock levels low
as a precaution against possible social unrest and damage to
property during campaigning for the May 29 elections.
"There might be some sporadic buying as usual but prices are
likely to remain stable," an Indonesian dealer said.
Indonesian palm olein finished last week at 1,450-55 rupiah/kg
in Jakarta, up from 1,445-50 rupiah a week ago.