(Updates prices, adds graph on biodiesel blending)
* Malaysia Oct 1-25 palm oil exports between -0.6 pct to
+3.8 pct - cargo surveyors
* Market braces for selling with demand seen tapering -
* Weekly prices up 1.8 percent
* Ringgit gains on govt' plan to introduce consumption tax
By Anuradha Raghu
KUALA LUMPUR, Oct 25 (Reuters) - Malaysian palm oil futures
ended lower on Friday after weaker-than-expected export data
fanned concerns that demand for the tropical oil has begun to
taper, while a stronger ringgit following the Malaysian budget
announcement curbed buying.
Cargo surveyor Intertek Testing Services said that shipments
of Malaysian palm oil fell 0.6 percent to 1,231,393 tonnes in
the Oct. 1-25 period, as a lull in exports to India offset a
slight increase to China and Europe.
Another cargo surveyor Societe Generale de Surveillance
showed exports rise 3.8 percent for the same period.
But losses were capped by expectations that output in
Malaysia, the world's No.2 producer, has slowed and would help
keep stocks under 2 million tonnes despite dwindling exports.
"The market is bracing for further selling given the
expectation that demand is tapering," said a trader with a local
commodities brokerage in Kuala Lumpur.
The Malaysian ringgit rose 0.6 percent to 3.1425
against the dollar on Friday after Prime Minister Najib Razak
said the government will impose a new consumption tax. A
stronger ringgit makes palm feedstocks more expensive for
By Friday's close, the benchmark January contract
on the Bursa Malaysia Derivatives Exchange had eased 0.8 percent
to 2,444 ringgit ($777) per tonne, chaffing away at weekly
prices which posted a small gain of 1.8 percent.
Total traded volume stood at 30,546 lots of 25 tonnes each,
lower than the usual 35,000 lots.
Investors are wary as measures the 6 percent goods and
services tax (GST) which will be implemented in April 2015 could
eat into local consumption demand.
"The implementation of such policies is likely to result in
a pullback in domestic demand, thereby weighing on palm oil
prices," Phillip Futures analyst Tan Chee Tat said in a note.
Malaysia is set to impose a requirement for biodiesel to use
7 percent palm oil, up from 5 percent now, as a way of whittling
down palm oil stocks and cushioning prices in the face of
growing competition from other edible oils.
Industry and government officials said the "B7" biodiesel
blend could be mandatory from December as talks with interested
parties were nearing a conclusion.
In other markets, Brent crude oil fell below $107 a barrel
on Friday in a third day of falls on concerns over increasing
supply and faltering demand despite signs of faster economic
growth in China.
In competing vegetable oil markets, the U.S. soyoil contract
for December fell 0.1 percent in late Asian trade. The
most-active January soybean oil contract on the Dalian
Commodities Exchange dropped 0.8 percent.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2458 -14.00 2455 2465 453
MY PALM OIL DEC3 2445 -17.00 2443 2461 3799
MY PALM OIL JAN4 2444 -20.00 2441 2460 16810
CHINA PALM OLEIN MAY4 6084 -70.00 6060 6132 940706
CHINA SOYOIL MAY4 7136 -58.00 7130 7204 686502
CBOT SOY OIL DEC3 41.12 -0.01 41.05 41.38 6647
NYMEX CRUDE DEC3 97.54 +0.44 96.99 97.57 14912
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=3.146 Malaysian ringgit)
(Editing by Joseph Radford)
- Commodity Markets
- Asia News
- Malaysian ringgit