Palm oil prices likely to stay firm this week
Palm oil prices likely to stay firm this week
KUALA LUMPUR (Reuters): Asian palm oil prices are likely to
stay firm with prospects of fresh export business and weakness in
regional currencies underpinning sentiment, traders said.
Palm oil traders are also waiting for Malaysia's official crop
data and export figures to provide direction.
The Palm Oil Registration and Licensing Authority (PORLA) is
expected to release the May output/stock/export data yesterday.
"We can't predict PORLA's numbers. PORLA can come out with
lots of surprises," said a trader in Kuala Lumpur.
Last week, Malaysian private crop forecaster Ivan Wong said
May's output was expected to be at 632,000 tonnes and end-May
stocks at 615,000 tons.
A Medan-based trader said: "They (prices) are going to stay
firm, with some players just can't resist the temptation to
export their products due to the strong dollar and domestic
political uncertainty."
Traders, however, said any price rises were likely to be
limited by persistent worries of further social unrest in
Indonesia.
"Olein is such a key and strategic commodity right now because
of its political implications. The majority of traders would keep
prices not too high compared with the 'official' agreed price,"
another trader in Indonesia said.
Some traders set Indonesian palm olein prices as high as 5,000
rupiah/kg, while others insisted on the "official" 3,500 level on
fears of fresh social discontent.
Regional traders said the palm oil trend also depended on
weakness in the ringgit and rupiah currencies which followed the
yen's slump last week.
"I think sentiment could be firm this week with the weak
currencies giving more support to prices," said a Singapore
trader who expects the ringgit to remain below the 4.00 per
dollar level.
The ringgit and rupiah were quoted at 4.04 and 13,850 to the
dollar on Monday morning.
Malaysia's benchmark, third month August futures contract
closed on Friday at 2,346 ringgit a ton. "We just can't predict
the resistance or support levels as the market remains volatile,"
said a Malaysian trader.