Malaysian palmoil prices up again

Malaysian palmoil prices up again

KUALA LUMPUR (Reuter): Palmoil prices rebounded at midday yesterday on shortcovering after sharp recent falls but traders said the upside could be limited by lack of keen demand and competition from Indonesian oil.

"Prices were up this morning as buyers tried to cover from the recent falls," a dealer said. "As today is Friday, we expect some covering ahead of the weekend."

He added that the rebound was expected to be brief as sentiment was bearish, due partly to competition from major producer Indonesia.

"Indonesia's production is seen picking up and the forecast is likely to increase this year," said a Kuala Lumpur-based refiner. "Indonesian dealers have to find a way to sell."

Traders in Jakarta said the market was offering competitive rates for overseas tenders because of bearish prices. "They want to offload quickly instead of waiting for prices to recover," said a Jakarta trader.

Local dealers said weak fundamentals such as a build-up in stock and expectation of small declines in January's output over December could restrict sharp gains.

Some plantations houses estimated January's output to fall by five to eight percent from December against earlier estimates of 10 percent.

The market is awaiting a crop report by private forecaster Ivan Wong on Monday to provide more estimates on output, stocks and export, traders said.

At midday close, April futures rebounded eight ringgit to close at 1,163 ringgit (US$455.18) a ton.

Physicals January crude palmoil (south) was offered 1,160 a ton. Among refined products, January RBD palmoil was offered at $467.50 a ton, FOB Malaysia, February at $472.50 and March at $480.

February RBD palm olein saw sellers at $485, March at $490, April/May/June at $502.50. March was traded at $490.

February/March RBD palm stearin was offered at $420 and February/March fatty acid distillate at $382.50.