Asian palm oil prices to remain steady this week
Asian palm oil prices to remain steady this week
KUALA LUMPUR (Reuter): Asian palm and laurics oil prices will hold steady this week, regional traders said yesterday.
They said Indonesian palm prices would be fueled by a supply shortage but that their upside could be capped by government intervention.
Indonesian traders said market operations by state commodities regulator Bulog, that began last Monday, were expected to put pressure on prices that rose sharply last week due to supply woes.
"The market is short of palm olein," one Indonesian trader said. "I expect the shortage to ease slightly this week but prices are likely to stay firm."
Another trader in Indonesia said Bulog, through a major refiner, was selling palm olein in one-liter bags at Rp 1,300 directly to consumers.
"Bulog's market operations are expected to begin having an impact on prices," the Indonesian trader said. "The operations are expected to become more aggressive this week."
Indonesian palm olein ended last week at Rp 1,400-1,410/kg, up from Rp 1,330-35 previously.
Expectation of more demand news and supportive export estimates could steady Malaysian palm prices but traders said the long-term outlook may be bearish on increasing output in the coming months.
Pakistan may return to the market this week to issue fresh tenders for palmoil for March shipment, traders said. Last week, Pakistan scrapped its tender of 6,000 tons of RBD palmoil for the second half of the March shipment because of high prices offered by the sellers.
SGS (M) Sdn Bhd on Friday estimated March 1-15 exports at 321,325 tons, up from 234,493 tons in February 1-15. The market expects more export estimates from SGS for March 1-20.
"Prices may hold steady on supportive export estimates but in the long term, prices will drop on the back of higher output," a dealer in Kuala Lumpur said. Production in March will rise to an estimated 600,000-610,000 tons from February's 427,508 tons because of improved weather conditions and the start of the seasonal upward cycle.
In the Philippines, coconut oil prices will drift sideways this week with many players preparing to attend the National Institute of Oilseeds Products (NIOP) convention in Arizona.
Trade in the market will likely ease in the absence of news with the approach of the long Easter holidays during the first week of April, Filipino traders said.
Prices for nearby months dropped about US$10 to $722 CIF Europe from the previous week. "It may be quiet because of the NIOP convention in Arizona and then you're going into Easter. It will stay within the $700-720 range until after Easter," a Filipino trader in a major company said.
Coconut oil will be well-supported at $700 with tight supplies of copra keeping prices firm, Filipino traders said.