Palm rises on export data, Euro debt outlook

JAKARTA: Malaysian palm oil rose as much as 1.7 percent on Monday, with prices supported by export data in second largest producer Malaysia and hopes that Europe's debt crisis will be resolved soon, but gains were capped by news of rising inventories.

The benchmark December palm oil futures on the Bursa Malaysia Derivatives Exchange closed 0.8 percent higher at 2,793 ringgit ($884) per tonne. It had earlier hit an intraday high of 2,818 ringgit a tonne.

Traded volumes for the December contract stood at 13,270 lots of 25 tonnes each compared with 12,133 lots on Friday.

Earlier on Monday, cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for Oct 1-10 rose 31.8 percent.

This was followed by a report by fellow surveyor Societe Generale de Surveillance, which said exports of Malaysian palm oil products for Oct. 1-10 rose 25.1 percent.

Analysts say festivals and holidays in top vegetable oil consumers India and China had boosted the export numbers in recent weeks.

Palm gains were capped by data from industry regulator the Malaysian Palm Oil Board (MPOB), which showed September palm oil stocks exceeded market expectations to rise 12.4 percent.

"Stocks' increase above 2 million tonnes (was) not good," said one Jakarta-based trader. Exports were more in-line with market expectations, so not too satisfying."

"People seem to be invigorated by the condition in the European Union," he added, referring to efforts to resolve the euro zone debt crisis.

World stocks and the euro rose on Monday while top-rated government bonds and the dollar fell after German and French leaders promised to announce fresh steps to tackle the euro zone debt crisis by the end of the month.

Palm oil prices, which have lost more than a quarter of their value so far this year, touched a one year low at 2,754 ringgit last week, weighed by economic uncertainty and the euro zone debt crisis.

In other vegetable oil markets, US November soybeans gained more than 2 percent, while China's most active May 2012 soybean oil contract traded lower after a one week holiday.

Brent crude futures rose $1 to $106.88 a barrel as sentiment improved as investors awaited details of a more decisive plan from Germany and France to stem the growing euro zone crisis.

A second Jakarta trader said investors were forecasting lower palm oil output numbers in Southeast Asia, ahead of the wet weather season.

Copyright Reuters, 2011