Malaysia palm oil futures sink

Malaysia palm oil futures sink

KUALA LUMPUR (Reuters): Malaysian palm oil futures gave back
all of last week's gains on Monday as the market's failure to
test higher levels prompted long liquidation, traders said.

"The market had looked toppish and when it failed to breach
the 870 ringgit resistance, players started to liquidate their
positions," said one trader in Kuala Lumpur.

The benchmark third-month January futures KPOF1 contract ended
down 39 ringgit at 830 ringgit (US$218.42) a ton after trading as
low as 827 ringgit.

Traders pegged immediate support at 820 ringgit.

The government's forecast of a 7.5 percent increase in 2001
output also brought to a halt the recent rise in prices following
encouraging export figures.

The Finance Ministry said on Friday that Malaysia's palm oil
production was expected to rise to 11.45 million tons next year
from an estimated 10.65 million in 2000, mainly due to an
expected 3.7 percent increase in the harvesting area.

Traders said the market also feared that a weakening rupiah
currency would lead to aggressive export sales from Indonesia,
the world's second largest palm oil producer after Malaysia.

At 1030 GMT, the rupiah was quoted at 9,380/9,420 to the U.S.
dollar, around its lowest level in three months.

Dealers said the currency has been under pressure following
growing tension between the U.S. and Indonesia and a recent
outbreak of violence in the country.

Traders said export data for the whole of October due on
Tuesday could provide some cheer to the market.

Cargo surveyor Societe Generale de Surveillance Malaysia Sdn
Bhd (SGS) had estimated Malaysian palm oil exports for the first
25 days of October at 789,807 tons, compared with 659,749 tons
for the same period in September.

Physical prices also weakened on renewed selling by producers
and slow products business.

November (south) crude palm oil was offered at 815 ringgit a
ton against bids of 805, and traded at 830 to 810.

Among refined products, November RBD palm oil was offered at
$230 a ton FOB and December at $235.

There were offers for November RBD palm olein at $250 and
December at $255.

November RBD palm stearin was offered at $180 and November
palm fatty acid distillate at $137.50.