Palm oil prices expected to be mixed in SE Asia
Palm oil prices expected to be mixed in SE Asia
KUALA LUMPUR (Reuter): Southeast Asian palm and laurics oils
are likely to be mixed this week, with higher supplies and weak
demand seen affecting the palm markets in Singapore, Indonesia
and Malaysia, regional traders said.
Philippines coconut oil prices are expected to stay at high
levels as scarce supply continues to prop up the market,
Filippino traders said.
"It's going to come off. The combination of supply improving
and demand weakening will drag prices down," a trader in
Singapore said. There was market talk that May palm oil output in
Malaysia may rise by about 10-12 percent over April's production
of 615,647 tons.
"Palm oil prices are going to drift lower with stocks going
up," a trader in Singapore said. Malaysian traders said that end-
May stocks are estimated to be above 700,000 tons, and stocks are
likely to increase in coming months.
Prices are also a bit high so some decline is anticipated,
traders in Singapore said, adding that an absence of export
business of fresh tenders to give direction to the market will
also weigh on prices.
Traders in Malaysia also added that there was no demand news
from India's STC, Pakistan and Egypt tenders last week and the
market hoped for some demand news this week. The market is
awaiting for export data for May from two cargo surveyors, Caleb
Brett and SGS (M) Sdn Bhd.
Third month, August futures which closed on Friday at 1,188
ringgit a ton are expected to trade in a range of 1,170 to 1,200
ringgit this week.
In Indonesia, palm olein prices, which have slid steadily
since early May, still had some downside potential as they were
at a premium to Malaysian values.
"I think prices will ease further this week," a trader in
Indonesia said. "Supply seems to be ample in Jakarta while
demand has been poor as buyers are waiting for prices to come
down further."
"I estimate that olein prices will test the Rp 1,300/kg level
this week," the Indonesia trader said. Indonesian palm olein
finished last week at Rp 1,350-60 in Jakarta compared with Rp
1,385-90 a week ago.
Indonesian traders said high May export taxes for crude palm
oil and its products had put a squeeze on exports, blunting
exporters' competitiveness and causing more oil to flow into the
market.
Philippines coconut oils are expected to stay at high levels,
dealers said. "It's hard to buy copra and a few dealers have
short positions so we'll still see firm prices," a dealer in the
Philippines said. "In 1995, I was able to buy 33,000 tons of
copra for the entire year while now, we're almost at mid-year and
I haven't even reached 300 tons yet," another trader in the
Philippines said.
Copra, the raw material used to make coconut oil, has been in
short supply after a string of typhoons battered coconut-growing
areas on Luzon island.
Trading in the Malaysian palm market is expected to be lower
due to technical reasons as the charts are showing a downward
trend, traders said.
"The market may pick up if there is some demand news come in,"
a dealer said, adding that he expects India's STC or Pakistan to
issue fresh tenders this week.