Malaysian palm oil up

Malaysian crude palm oil futures ended slightly higher in lacklustre trade on Thursday as the market awaited fresh leads, including an update on export numbers next week. But prices were supported by bullish comments from the head of the industry regulator, the Malaysian Palm Oil Board (MPOB).
The benchmark September contract on the Bursa Malaysia Derivatives Exchange closed up 3 ringgit to 2,482 ringgit ($720) a tonne, after reaching an intra-day high of 2,500 ringgit. "The market is looking out for fresh news, especially the export numbers as there has been talk that overseas Ramadan demand will be coming in," said one trader.
Industry officials say palm oil demand is expected to pick up from July as nations from South Asia to the Middle East lock in supplies for the Muslim holy month of Ramadan in September. Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will unveil export data for the first 10 days in July next Tuesday.
"The MPOB head has given some supportive comments on the market, which will keep the prices within a range," said another trader. Malaysian palm oil prices are expected to hold between 2,300 ringgit and 2,500 ringgit a tonne in the short term, the Malaysian Palm Oil Board said on Thursday.
"A price of 2,300 ringgit to 2,500 ringgit is sustainable at least in the short term, because there is a slight drop in production," Sabri Ahmad, chief of the MPOB, told reporters at a biofuels conference in the Malaysian capital. But the high global vegetable-oil prices are hitting demand for biodiesel and food, an oils analyst said.
"Prices are a bit too high and I expect them to come down to an average of 2,400 to 2,450 ringgit per tonne," James Fry, chairman of UK-based commodities research house LMC International Ltd, told reporters. Other traded contracts rose between 1 and 16 ringgit. Overall volume slumped to 4,445 lots of 25 tonnes each from around 12,000 tonnes that usually change hands on a routine day.
The commodity is more than 10 percent off a historic high of 2,764 ringgit reached in June on robust demand from India and China and dwindling reserves at home. September palm oil on Singapore's Joint Asian Derivatives Exchange climbed $4.25 to $723.50 a tonne in dull trade.
Indonesia has raised base export prices for palm oil products to bring them in line with international prices, the trade ministry said in a statement on Thursday. The government has also set base export prices for four other palm oil products under the new export tax set in June. In Malaysia's physical market, crude palm oil for July shipment in the southern region was quoted at 2,620/2,630 ringgit a tonne. Trades were done at 2,620 ringgit.