Palm oil consolidates in Europe

Palm oil consolidates in Europe

LONDON (Reuter): The palm oil sector in Europe was consolidating after rising US$7.50 to $10 yesterday morning on the back of Chinese license talk.

Talk that China was going to issue licenses to import olein from Malaysia and Indonesia boosted the market, resulting in a small amount of short covering as the price increased, traders said.

"The amount being talked about was 1.2 million tons but as they normally import around 100,000 tons a month, it looks like the market has just reacted due to the lack of other news to get it moving," said one.

"The market remains bearish and will probably fall back again as soon as people see sense over the China talk," he added.

Another said that he thought that this was old news and that it would include not just olein but all vegetable oils.

Crude traded at $477.50 and $480 for August and September respectively, and $500 for Jan/Mar. Olein changed hands at $515 and $517.50 for both August and September, while October/December sold from $507.50 up to $515.

Soy and rape oil rose with the palm oil sector, but also found support from a firm close in Chicago soybean oil futures.

At midday, soy and rape oil were 1.50 to two guilders per 100 kg above Monday's finish.

Lauric oils rose in line with the general trend. They ended the morning $5 to $10 up but off the high's.

Soy and rape oil and both the lauric oils were completely tradeless.