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