Malaysian crude palm oil futures closed higher on Thursday although gains were limited by investor concern about slowing global growth that could curb commodity demand. Prices rallied to new highs earlier this week as the second bailout deal for Greece boosted investor confidence, but worries have now set in on a longer-term growth outlook as fresh data showed the euro zone may slip into a recession.
"Right now the market is tracking external markets and not so much on crude palm oil fundamentals, which are not too bullish or bearish," said James Ratnam, an analyst with TA Securities in Malaysia. Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.7 percent to 3,272 ringgit ($1,086) per tonne. Prices hit a high of 3,294 ringgit on Wednesday, the highest since June 9 last year.
Traded volumes were thin at 22,589 lots of 25 tonnes each, compared to the usual 25,000 lots. Reuters analyst Wang Tao said prices will consolidate in a range of 3,244-3,292 ringgit per tonne based on technical analysis. Malaysian palm oil exports from February 1 to 20 eased just 2 percent and 0.6 percent from a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, respectively.
That indicated an improvement in demand prospects compared to a 14 percent decline for the first 15 days of the month. An improving demand outlook for the edible oil has lifted the futures market, which is up slightly above 3 percent so far this year. In related vegetable oil markets, the US soyoil contract for March delivery and the most active September 2012 soyoil contract on China's Dalian Commodity exchange were almost flat.
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