Palm oil prices in Asia expected to firm this week

Palm oil prices in Asia expected to firm this week

KUALA LUMPUR (Reuter): Asian palm and laurics oils prices are largely expected to be firm this week, with good demand and apparent low stocks of palm olein seen aiding Indonesian prices, regional traders said.

Malaysia's palm market is closely watching the Palm Oil Registration and Licensing Authority's (PORLA) release of key September output/stock/export figures yesterday, with traders expecting supportive data.

Philippine coconut oil prices are expected to be firm although the market may be vulnerable to profit-taking.

Indonesian traders attributed the low level of olein stocks to increased exports of crude palm oil.

"Sellers are making reasonably good margins by exporting palm oil instead of processing it into olein for the local market," one Indonesian trader said.

"This has apparently put the squeeze on olein in Jakarta."

Another Indonesian trader said there were several vessels bringing palm oil into Jakarta but that it would take time to process the oil into olein and channel it into the market.

Indonesian palm olein closed at around Rp 1,385, against Rp 1,345-1,350 in Medan.

Traders in Malaysia hope to get fresh leads from the official PORLA numbers. Friday's crop report by forecaster Ivan Wong featured virtually unchanged estimates, and had little impact on the market.

"All eyes are on the PORLA numbers. We hope that PORLA will announce supportive data to give the market a lead," a Malaysian trader said.

Wong estimated a 13 percent rise in September output to 795,000 tons, against a previous forecast of 14 percent growth, and end-September stock at 695,000 tons, against 700,000 previously.

"Apart from PORLA, the market is also waiting fresh tenders from Pakistan again," another trader said. Pakistan tendered for 6,000 tons of RBD palmoil for shipment up to October 20 twice last week, but did not buy because of unfavorable prices and a lack of suitable vessels.

"Technically, the palm market remains strong, and more technical buying and short-covering will emerge if December futures (third month on the Kuala Lumpur Commodity Exchange) hit the next resistance level of 1,420 ringgit," the trader said. December futures closed at 1,405 ringgit/ton on Friday. Philippine coconut oil prices are seen firm.

"Prices should be fairly firm. Despite the bullish support in fundamentals, we might already be on the high side so there might be dips on profit-taking. The consumers are also not on the buy side at the moment, a Philippine trader said.

Philippines coconut oil prices hit $720 a ton CIF Europe last week, slightly higher than the $710 previously.