Palm oil remains bearish in Asia

Palm oil remains bearish in Asia

KUALA LUMPUR (Reuters): Weak fundamentals curbed trade in
Malaysia's crude palm oil futures on Wednesday, amid slow demand
and rising output, but freight rates held unchanged on fear of
disruption to shipments, industry sources said.

With U.S. President George W. Bush talking war after last
week's attacks on New York and Washington, palm oil traders spoke
of possible disruptions in shipments from Malaysia and Indonesia
in the event of retaliatory attacks.

"There could be some disruptions if the U.S. launches an
attack against Afghanistan. Freight rates are steady this week,
but that's not because demand is coming back," said one freight
broker in Kuala Lumpur.

All foreign aid organizations and diplomatic staff have
evacuated Afghanistan ahead of possible U.S. strikes.

In Kuala Lumpur, brokers said freight rates from Peninsular
Malaysia and Sumatra in Indonesia were steady at US$23-$24 a ton
for the west coast of India. Rates to the east coast of India
were stable at $18-$19 a ton.

Rates to India, the world's largest edible oil importer, and
other main destinations such as China and Pakistan had weakened
by $1 a ton last week due to sagging demand.

By midday on Wednesday, the benchmark third-month December
contract was three ringgit higher at 929 ringgit ($244.47) a ton
on technical rebound.

Some traders said buyers from Pakistan, which borders
Afghanistan, had made inquiries this week due to rising tensions.

It normally buys around 108,000 tons of palm oil from Malaysia
and Indonesia a month.