JAKARTA, June 12 (Reuters) - Malaysian palm oil futures fell to their lowest
in two weeks on Friday and made their biggest weekly tumble in 12, as oversupply
concerns were compounded by signs that buyers could switch to competing oils as
the difference between prices has narrowed.
By Friday's close the August palm oil contract on the Bursa
Malaysia Derivatives exchange was down 0.7 percent at 2,277 ringgit ($605.91) a
tonne, recovering slightly from a low of 2,254 ringgit hit earlier in the
session, the benchmark's lowest level since June 1.
The contract declined 2.8 percent this week, its biggest weekly decline
since March 20.
"Prospects for some demand to be switched to soyoil has the market reluctant
to move higher," said a trader with a local commodities brokerage in Kuala
Lumpur. The trader noted that soyoil was now approaching a $70 premium to palm,
down from the normal gap of around $120.
"Until weather cuts production, supplies should remain burdensome unless
2015 output is significantly smaller than previous estimates."
Traded volume was heavy at 46,946 lots of 25 tonnes each, well above the
more usual 35,000 lots.
Indonesia, the world's top exporter of the edible oil, will begin imposing a
$50 per tonne levy on crude palm oil and $30 for processed palm products exports
from June 15, the country's chief economic minister said on Friday.
A rally that took palm prices to three-month highs earlier in June may run
out of steam as buying ahead of the Muslim festival of Ramadan fades and markets
brace for growing supply as the main harvest approaches, traders and analysts
Data from regulator the Malaysian Palm Oil Board on Thursday showed palm oil
stocks last month swelled to their highest since November to stand at 2.24
million tonnes, overturning expectations that robust export demand would dent
In other markets, oil prices slipped on Friday after the world's top crude
exporter Saudi Arabia said it was ready to raise output to new record highs,
potentially adding to a global supply glut.
In competing vegetable oil markets, the U.S. July soyoil contract
inched up 0.1 percent, snapping four days of declines, in late Asian trade but
was headed for its biggest weekly fall since May.
Meanwhile the most active September soybean oil contract on the
Dalian Commodity Exchange fell 1.56 percent after hitting its lowest level in
more than two weeks.
Palm, soy and crude oil prices at 1117 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2260 -21.00 2260 2260 1
MY PALM OIL JUL5 2263 -21.00 2234 2269 2142
MY PALM OIL AUG5 2277 -16.00 2254 2283 27808
CHINA PALM OLEIN JAN6 5132 -114.00 5130 5268 1029444
CHINA SOYOIL SEP5 5666 -90.00 5662 5756 412330
CBOT SOY OIL JUL5 33.33 +4.20 33.09 33.39 9430
INDIA PALM OIL JUN5 455.90 +4.20 449.60 457.30 1823
INDIA SOYOIL JUN5 609.50 +4.45 604.10 610.40 3930
NYMEX CRUDE JUL5 60.20 -0.57 59.84 60.63 32346
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.7580 ringgit)
($1 = 6.2081 Chinese yuan)
($1 = 64.0800 Indian rupees)
(Reporting by Fergus Jensen; Editing by Richard Pullin and Susan Thomas)