Malaysia palm oil futures end lower as covering dies down
Malaysia palm oil futures end lower as covering dies down
KUALA LUMPUR (Reuters): Malaysian palm oil futures ended lower on Friday after short covering eased and the government denied it was intervening to support prices.
Traders, however, expected a rally between next Monday and Wednesday as a top-level industry conference kicks off.
The Commodity and Monetary Exchange of Malaysia (COMMEX), which trades palm oil futures, is organizing a price outlook conference in Kuala Lumpur from March 7 to 9 and traders expected support to emerge then.
"Whether it is with the government's support or not, we see the market picking up again and running then," said a trader.
The Primary Industries Ministry, which regulates all commodity businesses in Malaysia, denied market talk on Friday that it had set a minimum price support level of 725 ringgit a ton ($190.78) for crude palm oil.
The denial came after speculation that federal crop agency Felda was intervening to prop up prices, which fell only slightly this week despite a huge rise in import taxes by India, the biggest buyer of palm oil.
The Primary Industries Ministry also said it could not confirm market talk that the government would ask major crude palm oil producers to set aside five percent of their annual output to run power plants.
The ministry said recently that palm oil could be used to power energy plants.
At the close, the benchmark third-month May [KPOK1] futures position was down 11 ringgit at 765 ringgit ($201.32) a ton after trading as high as 786.
Physical March (south) crude palm oil was offered at 735 ringgit a ton against bids at 730. It was traded at 745 to 735.
March (central) was offered at 740 ringgit against bids at 735. It was traded at 745 and 740.
Among refined products, March RBD palm oil was offered at $212.50 a ton FOB and April at $217.50.
There were offers for March RBD olein at $220 and April at $225.
March RBD palm stearin was offered at $187.50 and March palm fatty acid distillate at $165.