(Updates lead and prices)
* Price falls to lowest since Aug. 14 in early trade
* Palm oil under pressure from forecasts of surging supplies
* Palm oil futures could fall in next 4 mths to 2,000
* Rising demand of palm for biodiesel could limit downside
By Anuradha Raghu
KUALA LUMPUR, Sept 23 (Reuters) - Malaysian palm oil futures
ended higher on Monday as the ringgit weakened, after falling
earlier in the day to their lowest in more than a month on
predictions that rising output of the tropical oil could drag
prices to new lows in early 2014.
Industry officials at the Globoil Conference in India had
warned that crude palm oil prices are poised to slip in the next
four months to as low as 2,000 ringgit, as output peaks in the
top two producers Indonesia and Malaysia.
"They're talking about supply coming in, that's why the
market is under tremendous pressure," said a trader with a
foreign commodities brokerage in Kuala Lumpur.
"In the last quarter of the year, production will rise,
exports will stay the same, and end-stocks will go up," the
trader added. "The only minor support is the weakness of the
By Monday's close, the benchmark December contract
on the Bursa Malaysia Derivatives Exchange had edged up 0.4
percent to 2,309 ringgit ($721) per tonne. Prices in early trade
dipped to 2,279 ringgit, the lowest since Aug. 14.
The Malaysian currency fell more than 1 percent
against the U.S. dollar on Monday, improving margins for
overseas buyers and stoking demand for the ringgit-priced
Total traded volumes stood at 29,253 lots of 25 tonnes each,
slightly below the average 35,000 lots.
Despite the forecasts of surging vegetable oil supplies in
the coming months, rising demand of palm oil for blending into
biodiesel could help curb losses and perhaps even lift prices
once stocks start thinning in early 2014.
Indonesian officials also expect the country's local
consumption of the oil to rise following a government move to
increase palm oil use in diesel to 10 percent from 7.5 percent.
Malaysia plans make the same 10 percent requirement in its
biodiesel policies, a government official said late August.
Export taxes also reinforce the appeal of turning crude palm
oil into biofuel for local use, according to James Fry, chairman
of commodities consultancy LMC International at the Globoil
conference on Saturday.
Indonesia will retain its export tax for crude palm oil at 9
percent for October. Malaysia, the No.2 producer, has decided to
keep its export duty at 4.5 percent, unchanged since March.
In other markets, crude oil rose slightly to hold above $109
a barrel on Monday as upbeat business surveys in China and
Europe pointed to stronger oil demand while a possible thaw in
U.S.-Iran relations underpinned easing supply concerns.
In vegetable oil markets, the U.S. soyoil contract for
December eased 0.2 percent in late Asian trade.
The most-active January soybean oil contract on the
Dalian Commodities Exchange fell 0.7 percent upon resuming trade
on Monday, after being closed from for the mid-autumn festival.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2314 +9.00 2288 2314 206
MY PALM OIL NOV3 2311 +11.00 2281 2314 3825
MY PALM OIL DEC3 2309 +9.00 2279 2315 14839
CHINA PALM OLEIN JAN4 5364 -52.00 5310 5378 244514
CHINA SOYOIL JAN4 7038 -48.00 6988 7052 441694
CBOT SOY OIL DEC3 42.28 -0.06 41.96 42.38 10576
NYMEX CRUDE NOV3 104.99 +0.24 104.10 105.12 22164
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.202 Malaysian ringgit)
(Editing by Tom Hogue and Muralikumar Anantharaman)
- Commodity Markets
- USA News
- Malaysian ringgit