Asian palm oil prices may rise

Asian palm oil prices may rise

KUALA LUMPUR (Reuter): Southeast Asian palm oil prices may
firm slightly this week on prospects of strong demand from
traditional buyers and expectation of lower output, regional
traders said.

"Exports look good while the increase in July production was
not as big as anticipated. (Third month October) should test
resistance at 1,120 ringgit a ton and then maybe move onto 1,150
ringgit," said one Singapore trader in a local commodity house.

Two Malaysian cargo surveyors, Caleb Brett and SGS (M) Sdn
Bhd, said palm oil exports in July were estimated at 667,802 and
649,331 tons.

Malaysia's Palm Oil Registration and Licensing Authority said
exports in June were 569,727 tons.

October futures contract closed on Friday at 1,085 ringgit a
ton. One Singapore dealer said October palm oil should fluctuate
between 1,085 to 1,150 ringgit a ton, with the commodity well
supported at 1,050.

But another dealer said any increase may be capped in the
absence of higher demand from major buyers like China.

"I'd say the price will probably trend sideways. It should
range within 10-15 ringgit either way," said the Singapore
dealer.

Palm olein prices in Indonesia are expected to be steady on
good demand but ample supply could cap the upside. Buyers who
stayed out of the market following the riots in Jakarta last
weekend (July 27-28) were expected to resume purchases,
Indonesian traders said.

"Many of the out-of-town buyers were quiet through the week
following the problems," one said. "I expect them to return to
the market this week as things have normalized."

Riots began after police took control of the Indonesia
Democratic Party headquarters in the capital from supporters of
Megawati Sukarnoputri, who was ousted as party leader by a
breakway faction backed by the government.

Indonesian traders said sharply lower August export taxes on
crude palm oil and products such as palm olein were unlikely to
have any significant, short-term impact on domestic prices.

Indonesian palm olein finished last week at 1,320-25
rupiah/kg, unchanged from a week ago.