Palm oil prices rise slightly

Palm oil prices rise slightly

LONDON (Reuter): Palm oil prices in Europe were barely changed
yesterday morning from the previous day's close following the
release of the latest Malaysian output, stocks and export data.

Figures released by the Malaysian Palm Oil Registration and
Licensing Authority (PORLA) had little impact although at first
they appeared bullish.

PORLA put stocks at 689,633 tons at end-March against 723,399
tons at end-February.

Exports were running at 565,219 tons during March against
380,267 tons in February, PORLA said.

PORLA said Malaysian palm oil output during March had risen by
35.71 percent to 683,196 tons.

Ivan Wong in his last estimate for March had forecast a rise
of 32 percent while the Malaysian Oil Palm Growers' Council
(MOPGC) projected an increase of 33 percent.

Traders said that based on the stock figure the report had
looked bullish, but when they had time to stand back and look at
the output they changed their view.

"The stocks look bullish, but if output is running at 683,196
tons now it could well be around 800,000 a month during the main
production period of July through to October," said one trader.

Traders said Malaysian exports were not running at a high
enough level to take up the increased production and the market
would have to adjust downward as a result.

"A lot of countries who normally buy palm oil are buying
sunflower oil and other soft oils because they are more
competitive." said another trader.
Currently sunflower oil is around $512.50 to $515 a ton fob
against olein's $570 to $580 a ton.

"I think we are going to see a slow change back to long term
fundamentals on the palm oil market against the current trend of
day to day sentiment driven prices," said one trader.

However, other traders said they had been saying this for some
time now and so far it has not happened.

Traders said Malaysian output was likely to increase further
with the young plantations in the east reaching their prime while
the older trees were still performing well.

"Also you have to look at Indonesia where a lot of the new
plantations are getting into their stride," said one.

On Tuesday morning crude palm oil cif Erope opened mixed at
$2.50 up t