Palm oil ends lower, focuses on China

Palm oil ends lower, focuses on China

KUALA LUMPUR (Reuters): Malaysia's palm oil futures ended lower on Tuesday as players awaited confirmation from China that it has issued palm oil import quotas and developments in Europe on a possible ban on all animal fat in feedmeal.

The new benchmark third-month April futures contract was down one ringgit at 825 ringgit ($212.89) a ton after trading as low as 810 ringgit.

Prices rebounded at the close after the market digested news, quoting trade sources in Malaysia, that China on Tuesday had issued the first batch of palm oil import quotas for the year for the amounts of 600,000 tons.

Volume was 1,758 lots, down from 1,863 at the close on Monday.

"The market wants to know more details from China. If the amount will only reach 600,000 tons for the whole year, then of course it's bearish," said one trader in Kuala Lumpur.

"But in general, news from China and a possibility of the ban on the use of animal fat in Europe helped the market rebound from early lows," he added.

China's palm oil import quota is expected to rise to 2.1 million tons this year, when it is expected to enter the World Trade Organization, from 1.5 million tons in 2000, according to Malaysian government officials and traders.

Physical January (south) crude palm oil was offered at 745 ringgit a ton against bids of 740. Trade was at 740. January (central) saw offers at 755 ringgit a ton against bids of 750, with trade done at 750.

February (south) was offered at 780 ringgit against bids of 770, and no trade was reported. February (south) saw offers at 780 against bids of 772 and deal was reported at 780.

Among refined products, February RBD palm oil was offered at $220 a ton FOB and March at $227.50.

There were offers for February RBD olein at $227.50 and March at $235.

January RBD palm stearin was offered at $195, and January palm fatty acid distillate at $180.