Palm prices rise on bargain-buying, but high stocks limit gains
Malaysian palm oil futures rose on Thursday, thanks to bargain-buying. However, a gradual build-up of stocks in Malaysia and Indonesia amid sluggish demands?and weakness among rival edible oils on the Dalian Commodity Exchange capped gains.
The benchmark contract for palm oil delivery in October on the Bursa Derivatives Exchange rose 5 ringgit or 0.11% to 4,606 Ringgit ($1,131.70), a metric tonne, at closing.
A Kuala Lumpur based trader stated that "Crude Palm Oil Futures are trading in the range 4,500-4700 ringgit per tonne, therefore, trade below 4,600 attracts buying interest."
Anilkumar?Bagani, the head of commodity research at Sunvin Group in Mumbai, explained that relative higher stocks of palm?oil in top producers Indonesia, and Malaysia, are weighing down on the contract.
Indonesian palm oil inventories rose 18.9% monthly in 'May, after exports plummeted. Malaysian palm oils stocks reached a four-month peak in 'June due to an increase in production that outpaced the growth in demand.
Bagani stated that "the delay in the release of Indonesian allocations for B50 mandate and European deforestation policies are affecting palm oil price."
Intertek Testing Services & AmSpec Agri Malaysia, cargo surveyors, said that Malaysian palm oil exported for the period July 1-15 rose by between 4% and 12,4% compared to a previous month.
Dalian's palm oil contract dropped 0.71%, while the most active soyoil contract fell 0.34%. Chicago Board of Trade soyoil prices were?up by 0.18%.
Palm oil monitors the price changes of competing edible oils as it competes to gain a share in the global vegetable oil market.
A circular posted on the Malaysian Palm?Oil Board's website revealed that Malaysia had raised its crude palm oil?reference prices for August to a level which maintains the 10% export duty.
Technical analyst Wang Tao stated that palm oil may revisit its high of 4,630 Ringgit per ton on July 9, as it is close to breaking a declining trendline.
(source: Reuters)
