Palm oil steady in Europe despite lower close in KL
Palm oil steady in Europe despite lower close in KL
LONDON (Reuter): Palm oil prices held steady on the European vegetable oil market yesterday morning despite a sharply lower close in Kuala Lumpur.
Malaysian palm oil futures fell sharply as the ringgit bounced back against the dollar.
"The recovery of the ringgit is very much a local matter and has little effect on the international market, where steady demand for palm olein is supporting prices," said one trader.
Other traders said although currency has been an important factor new features are now beginning to over shadow it.
"Since Indonesia altered its export tax structure exports of olein have been increasing and sooner or later this will hurt Malaysia," said one trader.
Traders said this was beginning to show in Malaysian exports. "In Ivan Wong's latest report exports remain over the magic 600,000 tons but aggrieves selling by the Indonesia will start to eat into the Malaysian market," said another trader.
In his latest report the Malaysian private forecaster put August output at 853,000 tons, up 2.4 percent over July and stocks at 870,000 tons against 769,275 at end-July.
Exports were projected at 650,000 tons during August against 715,906 tons in July.
European trader said the Wong report appeared to be slightly bearish, but so far has had little impact.
Earlier this week traders said they expected India's State Trading Corporation (STC) to tender for palm oil on Wednesday and Friday until the end of the month.
"We have not seen the STC today and must assume they, like the rest of us, are waiting to see where the market settles," said a trader.
At midday crude palm oil sellers cif Europe were unchanged after Oct traded at $505 and Oct/Dec at $505 a ton cif.
Among products RBD palm oil was also $2.50 higher while olein was unchanged to $2.50 up after Sep traded at $522.50, Oct at $525, Oct/Dec at $522.50 and Jan/Mar at $520 a ton fob Malaysian ports.
Coconut oil sellers were unchanged to $2.50 higher while palmkernel oil was unchanged.
In soft oils soy and rape oil were both unchanged.