Palm oil down further at Euro veg oil market

Palm oil down further at Euro veg oil market

LONDON (Reuter): Palm oil posted further losses at the close of the European vegetable oil market on Tuesday following the sharply lower finish in Malaysia.

Near panic selling in Malaysia sent palm oil prices in Europe tumbling with sentiment in Kuala Lumpur badly hit by a report from the U.S. embassy which projected palm oil stocks at end- September at 1.01 million tons.

Palm oil has been looking shaky for some time with rising output and stocks against a background of slow demand from major buyers.

But traders in Asia hope that the shake out in prices may bring some traditional buyers back to the market.

News that Indonesian has restructured its palm oil export tax was not seen as having an immediate impact, but looked bearish for the future.

Under the new structure, crude palm oil will be subject to an export tax of five percent while olein will be taxed at two percent.

"The new structure looks bearish, but there is very high demand in the local Indonesian market for olein and while they can get better prices for their oil at home they have no need to export," said one trader.

On the lauric oil market the $600 level was tested in coconut oil but prices bounced back after Jul/Aug and Aug/Sep both traded at the price.

"$600 seems as low as people want to go at the moment," said one trader.

At the close of business crude palm oil cif Europe was $7.50 to $5 down while products were $7.50 to $15 down with further light trading in olein reported.

Coconut oil finished with sellers $12.50 down and hovering just over just the $600 at between $602.50 and $607.50 a ton.

Jul/Aug traded at $602.50 and $600, Aug/Sep at $600, $620.50 and $605 and Oct/Nov at $605 a ton cif.

Palmkernel oil was $7.50 to $10 down in a neglected market.

Dutch soy oil closed with sellers one gilder down and rape oil one to 1.25 gilders lower with only light trading reported prior to the higher opening in Chicago.