Tuesday, 25 August 2015 10:32
JAKARTA: Malaysian palm oil futures edged up on Tuesday, propped up by fresh data showing stronger exports this month, but traders remained cautious after four straight days of declines and expectations prices will fall further in the short term.
By the midday break, the benchmark palm oil contract for November on the Bursa Malaysia Derivatives exchange was up 0.89 percent at 1,933 ringgit ($ 456) a tonne.
Traded volume stood at 24,663 lots of 25 tonnes each, well above the roughly 13,500 lots usually traded by midday.
“Today, the whole scene changed,” said a trader with a foreign commodities brokerage in Kuala Lumpur, pointing to “encouraging” Malaysian palm export data released on Tuesday after the broad market selloff on Monday.
Exports of Malaysian palm oil products for Aug. 1-25 rose 10.75 percent to 1,275,869 tonnes from 1,152,045 tonnes shipped during July 1-25, cargo surveyor Intertek Testing Services said.
Physical demand for palm, meanwhile, remained weak, the trader said.
“World demand is slowing down,” the trader said.
Malaysian palm oil futures fell more than 4 percent on Monday as the tropical oil tracked other global markets lower on concerns about the Chinese economy.
Palm oil has sunk 10 percent this month and is currently trading near its lowest level in more than six years.
Wang Tao, a Reuters market analyst for commodities and energy technicals said he expects benchmark palm futures to revisit an Aug. 24 low of 1,904 ringgit per tonne as the contract is still riding a downtrend.
In comparative vegetable oils, the US September soyoil contract was down 0.3 percent in early Asian trade, while the most active soybean oil contract on the Dalian Commodity Exchange was down 1.6 percent. Dalian RBD palm oil was down 4.3 percent.
Crude oil markets recovered more than a percent on Tuesday after a sharp drop in the prior session, although prices held near 6-1/2-year lows as continued weakness in Chinese equities triggered fears of an economic tailspin in the region.
