Palm prices are little changed, traders say
Malaysian palm futures were mostly flat on Monday, as traders assessed the demand and supply data from the palm oil board.
By midday, the benchmark palm 'oil contract on the Bursa Malaysia Derivatives Exchange for March delivery had gained 3 ringgit (0.07%) to 4,039 Ringgit ($993.85) per metric ton. The contract dropped 0.17% during the previous session.
David Ng is a proprietary trader with Kuala Lumpur based trading firm Iceberg X Sdn Bhd. He said that the market (slightly higher) during Asian hours was due to traders reviewing data from the Malaysian 'Palm Oil Board.
The data shows that Malaysian palm oil stocks increased by 7.58% in December to 3,05 million metric tonnes, their highest level for seven years. This is due to the fact that export demand continues to exceed production.
Dalian's most-active palm oil contract lost 0.32%, while the soyoil contract gained 0.03 %. Soyoil prices at the Chicago Board of Trade rose 0.7%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The oil price edged up as escalating Iranian protests sparked concern about the OPEC producers' supplies. However, efforts to resume?oil imports from Venezuela along with expectations that the market would be oversupplied in this year limited gains.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Intertek Testing Services, a cargo surveyor, estimated that the exports of Malaysian palm oil products from January 1-10 increased by 29.2% compared to a month ago. AmSpec Agri Malaysia is expected to release its export estimates later today.
Analyst Dorab Mistry stated that Malaysian palm oil futures are likely to be under pressure until production levels down, as output was higher than expected in particular in Malaysia, leading to an increase in inventories.
The palm ringgit's trade currency strengthened by 0.15% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
(source: Reuters)
