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Palm oil slips, Greek deal supports

palm--oilSINGAPORE: Malaysian palm oil futures edged down on Tuesday, as traders booked profits from a near one-week high after Greece's international lenders agreed on a financial aid deal that boosted market optimism.


On the local front, investors are watching Malaysian palm oil output to gauge whether stocks will reach another record high, especially after the latest cargo surveyor data pointed to weaker export demand.


"Demand is tepid with rumours that India may import on domestic shortfall. Speculators are also seen pushing up futures amid optimism that output in the fourth quarter will avert the looming 'supply cliff'," said a trader with a local commodities brokerage in Malaysia.


By the midday break, the benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.1 percent to 2,430 ringgit ($796) per tonne, after going as high as 2,458 ringgit, a level last seen on Nov. 21.


Total traded volumes stood at 12,893 lots of 25 tonnes each, slightly higher than the usual 12,500 lots.


Technicals showed palm oil would revisit its Nov. 20 high of 2,485 per tonne based on a wave analysis, said Reuters market analyst Wang Tao.


Cargo surveyor data showed a slight decline of below 2 percent for Malaysian palm oil shipments in the first 25 days of November from a month ago


The market, however, expects weaker palm oil prices to stimulate demand for price-sensitive market such as India and Pakistan in the weeks to come.


China might be a different story as rising stocks slow exports.


Palm oil stocks in China could hit one million tonnes by year-end, up from 790,000 tonnes last week, thanks to surging imports and a stagnant domestic demand, said the China National Grain and Oils Information Centre in a report on its website (


Brent crude rose above $111 per barrel on Tuesday after Greece's international lenders reached a deal on a new debt target, although worries about a looming US fiscal crisis kept a lid on gains.


In other vegetable oil markets, US soyoil for December delivery inched up 0.5 percent in early Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange edged up 0.3 percent.

Copyright Reuters, 2012


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