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.