Asian palm oil price seen rising

Asian palm oil price seen rising

KUALA LUMPUR (Reuters): Asian palm oil prices will continue
their upward trend this week with prospects of good export
business due to palm's discount over other vegetable oils, with
currency factors boosting sentiment, regional traders said.

"Palm is still looking firm," a senior trader in Singapore
said. "The medium-term outlook is looking good."

Fundamentally, buying for palm oil is running at strong
levels, dealers said.

"The buying is at a reasonable level, maybe a little lower
than others had hoped. But the buying is still there," a dealer
said. The pace of buying from traditional customers like India is
good along with those from other buyers in Europe.

Malaysian traders expect more demand as palm prices are much
cheaper than other vegetable oils and this could trigger more
export business in coming months.

One dealer in Singapore said the availability of ships for
November shipment remained tight.

"It's still a bit tight for November shipment," the dealer
said. Traders were unable to provide more details on the scarcity
of ships.

Dealers said the performance of palm oil on the Kuala Lumpur
Commodity Exchange (KLCE) would continue to be dictated by the
level of the ringgit against the U.S. dollar.

"When it comes to the KLCE, the movement of palm will be
ringgit-based," a dealer said.

Malaysia's benchmark, January futures which closed on Friday
at 1,709 ringgit a ton on the KLCE should be firmly supported
above the 1,700 ringgit level.

The Malaysian ringgit fell to a low of 3.4520 to the dollar on
Friday, which sparked off more speculative buying interest. But
it recovered to settle at around 3.34 on Saturday morning.

Indonesian traders expected palm olein and oil prices to be
stable while eyes were still on the currency.

"Again, the currency will be the main issue in the market this
week," said a trader in Indonesia.

Indonesian traders said the market generally ignored the
announcement of an agreement on Friday between the International
Monetary Fund (IMF) and the Indonesian government on a program to
restore confidence in the economy.

"The problem with the announcement is that it lacks details,
such as figures. The rupiah did not see any significant change
after the announcement either," said an Indonesian trader.

Indonesian crude palm oil was quoted at Rp 1,825 per kilogram
in North Sumatra city of Medan, while palm olein held steady at
Rp 2,020, traders added.