Malaysian palm oil futures rose

March 21, 2013

Malaysian palm oil futures rose to a one-week high on Wednesday on higher export demand, although gains were curbed after Cyprus's rejection of a proposed bailout plan led to worries of a default. But palm prices were supported by Malaysian palm oil exports that rose 11 percent for the March 1-20 period to 927,665 tonnes, up from 835,612 tonnes a month ago, according to cargo surveyor Intertek Testing Services.

"If exports continue at this rate, we will see a figure of around 1.4-1.5 million tonnes for the full month," said a trader with a foreign commodities brokerage in Malaysia. 

By the midday break, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 0.7 percent to 2,431 ringgit ($778) per tonne, below its intraday high at 2,438 ringgit, a level last seen a week ago on March 12. Total traded volume stood at 17,924 lots of 25 tonnes each, higher than the usual 12,500 lots.

 Technical analysis indicates palm oil remains neutral in a range of 2,383 to 2,436 ringgit per tonne, and only an escape will point a future direction, said Reuters market analyst Wang Tao. Refined palm olein exports almost doubled in the March 1-20 period, offsetting a decline in crude palm oil shipments and leading to higher overall exports, cargo surveyor data showed. Market participants are counting on rising exports and seasonally slower production to pull down Malaysia's inventory levels. Stocks reached a record 2.63 million tonnes in December but have been gradually easing since then, dropping to 2.44 million tonnes by the end of February. In other vegetable oil markets, US soyaoil for May delivery gained 0.4 percent in early Asian trade. The most-active September soyabean oil contract on the Dalian Commodities Exchange was almost flat.

Source: