Palm oil prices slide in Asia

Palm oil prices slide in Asia

KUALA LUMPUR (Reuter): Asian palm and laurics oil prices may slide further this week with the fall in the U.S. soyoil market and slow demand from around the region seen affecting sentiment, traders said yesterday.

"Palm is on a crash-and-burn mode," a Singapore trader at a Western commodity house said. "With China not buying a lot and Pakistan and India just showing steady demand, palm oil is going to be weak."

Malaysian traders said there was no sign of any fresh demand from traditional buyers like Pakistan, India's STC and China.

"It's going to test the (October futures) 1,020 ringgit level. Nearby palm is not at a big discount to other oils so palm is going to have to buy a market," another dealer said.

Prices of third month October futures will easily shed 50 ringgit this week in the absence of news which may provide support for the market, traders said.

October futures closed on Friday at 1,063 ringgit a ton.

"The market is expected to be weak this week because of a lack of supportive factors," one trader in Indonesia said.

"Buyers are generally afraid to take positions because of wild fluctuations in Malaysia, which have an impact in Jakarta."

Palm oil dealers said the fundamental picture remains unchanged. Bumper supplies from Malaysia and Indonesia easily outstripped demand and the critical absence of heavy Chinese buying put a lot of pressure on prices.

Traders in Malaysia are expecting the release today by crop forecaster Ivan Wong of July estimates on output/stock/export, which may give the market a lead.

Indonesian traders said supply in Jakarta was also expected to be ample following the arrival of fresh shipments of olein.

The traders expect two shipments of more than 3,000 tons to reach Jakarta on Tuesday plus 1,000 tonnes of crude palm oil.

"Supply will be ample this week and this is likely to put some downward pressure on prices," one trader in Indonesia said.

Indonesian palm olein closed last week at 1,305-10 rupiah/kg against 1,310-15 rupiah a week ago.

The Philippines traders said coconut oil prices are expected to move sideways to lower.

"I expect the drop in soybean prices in the United States to pressure down coconut and palm oil prices," said a trader in the Philippines.

The trader expected buyers of vegetable oils to shift to soybean oil due to the drop in prices.