CPO extends losses, freight rates down

CPO extends losses, freight rates down

KUALA LUMPUR (Reuters): Malaysia's crude palm oil futures
struggled to stay above the 982 ringgit support level on Friday
and ended mostly lower due to uncertainties in future outlook.

The benchmark November futures contract, which becomes the
second month contract from Monday, ended down 12 ringgit at 987
ringgit (US$259.74) a ton after trading as high as 1,012 ringgit.

Some analysts said the downside was intact and the downward
momentum would increase if the market broke 982 ringgit.

Traders said September palm oil output, end-month stocks and
exports estimates released by private forecaster Ivan Wong put
more pressure on the market.

Wong said Malaysia's palm oil output in September was expected
to reach 1.07-1.08 million tons from 978,390 tons in August.

Wong forecast end-September stocks at 955,000-965,000 tons
compared with 878,316 in end of August. Exports in September were
estimated at 845,000-850,000 tons against 879,717 tons in August.

"Demand is so bad. I don't know where buyers are," said one
trader in Kuala Lumpur.

Brokers said palm oil freight rates from Malaysia and
Indonesia weakened again this week because of slow demand from
major buyers such as India, China and Pakistan.

Freight rates from Peninsular Malaysia and Sumatra in
Indonesia eased to $23-$24 a ton for the west coast of India from
$24-$25 last week. Rates to the east coast of India were $1 lower
at $18-$19 a ton.

Tension in the Middle East following this week's terror
attacks on the United States raised speculation that world oil
prices would rise further and eventually lift freight rates.

But trade sources said India's palm oil imports from Malaysia
and Indonesia might not even reach 200,000 tons in September, way
below normal, because of high import duties and prospects of good
winter oilseeds crop.

Malaysian and Indonesian October exports to India might
slightly improve from September to as much as 300,000 tons, but
that amount would be 50,000 tons less than the normal figure,
they said.

On the physical side, September crude palm oil for the south
and central regions were offered at 1,000 ringgit a ton against
bids at 995.

Business was done at 995 ringgit for both sides.