Malaysian palm oil ends flat as Indonesia supply concerns offset by weak exports

KUALA LUMPUR: Malaysian palm oil futures ended little changed on Wednesday, as concerns that Indonesia’s plan to create a state agency to manage commodity exports could tighten supplies were offset by weak export data.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 2 ringgit, or 0.04percent, to 4,583 ringgit (USD1,154.99) a metric ton at the close. Indonesian President Prabowo Subianto told parliament on Wednesday that a state firm will be set up to manage the export of natural resources, including palm oil, coal and ferroalloy.

Indonesia’s move is expected to keep the market supportive and resilient, as the likelihood of aggressive selling remains low given the possibility that buyers may shift their demand to Malaysia, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari. “Buyers’ attention may turn to Malaysia until more is known about how the mechanism implemented in Indonesia will work out,” he said. Cargo surveyors estimated that exports of Malaysian palm oil products for May 1 to May 20 fell between 13.9percent and 20.5percent from a month earlier.

Dalian’s most-active soyoil contract rose 1.31percent, while its palm oil contract added 1.44percent. Soyoil prices on the Chicago Board of Trade were up 0.24percent.