KL palm oil holds up on pre-holiday buying

KL palm oil holds up on pre-holiday buying

KUALA LUMPUR (Reuters): Malaysian palm oil futures held firm on Friday on buying from players covering ahead of a shorter trading week ahead, traders said.

The market will be closed on Monday for the Muslim New Year.

Sentiment was still not very good, with players worried about growing stocks of crude palm oil due to the government's slow delivery of its promise to burn excess oil in the market.

"The burning issue in the market is whether all this oil is going to be burnt," said a trader, referring to a government pledge to use some 600,000 tons of oil as fuel for energy plants.

An industry source working with the government on the proposed burning said on Friday the plan was progressing well and would take off very soon.

The benchmark third-month June futures closed unchanged at 830 ringgit (US$219.73) a ton after moving between a high of 840 and low of 822.

Volume was a modest 1,592 lots.

The physical sector also noted some covering ahead of the holiday.

Traders said the physical sector was mostly quiet as players waited for fresh leads.

Physical March (south and central) was offered at 810 ringgit against bids of 805. No evening trade was reported but in the morning the contracts traded at 810 ringgit.

April (south) was offered at 815 ringgit and bid at 810. It was traded at 810.

April (central) saw offers at 810 ringgit against bids of 815. No trade was reported in the evening. In the morning south traded at 810 and central between 810 and 815.