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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

13/08/2004

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Dow Jones

CATEGORY

HEADLINE

Trade Still Slow In Malaysia
12/08/04, KUALA LUMPUR (Dow Jones)--Asian cash palm oil prices weremixed Thursday, with products in Malaysia unchanged to slightly higheramid slow trading as supply and demand figures for July failed to inspireinterest.Activity in the Malaysian market has been sluggish for most of theweek amid uncertainty over price direction.The government-run Malaysian Palm Oil Board issued official Julysupply and demand figures midday.The MPOB said Malaysia's palm oil exports in July rose 25.4% on monthto 1.11 million tons. It said July palm oil output rose 8.5% on month to1.27 million tons while end-July stocks rose 6.6% on month to 1.29 milliontons.Traders said the MPOB report had little impact on the market.Although exports rose sharply in July, the upbeat demand figures wereoffset by stronger-than-expected growth in production.As a result, end-July stocks as reported by the MPOB were largelywithin expectations, traders said.Wednesday, traders said private surveyor Palmis Management Bhd. hadestimated end-July stocks at 1.315 million tons, only slightly higher thanMPOB.Traders said participants were still unsure about the outlook for palmoil prices and largely stayed on the sidelines.Market players are waiting for the U.S. Department of Agriculture'smonthly soybean crop report, due later Thursday and expected to bebearish.They are also watching developments in India amid talk that thegovernment may cut import duties on edible oils.India's Business Standard quoted unnamed sources as saying India'sfinance ministry is likely to reduce import duties on nine commodities,including edible oils, to stem inflation.There has also been rumors of a potential reduction in base prices forpalm oil imports. The government calculates import duties for palm oilproducts according to a set of predetermined base prices, regardless ofactual market prices.Meanwhile, traders said palm oil prices may struggle to move higher inthe near term if, as expected, the USDA's soybean crop report is bearish.They said renewed selling interest from a large trading company, whichexports mainly to the Middle East, may also keep the market underpressure."They are selling October/November/December palm olein at $402.50 (ametric ton), which is $5 cheaper than what other sellers are offering," atrader said.Aggressive selling pressure from the trading company has, in the past,led to a drop in prices, though often short lived, traders said.In the cash market, CPO for August shipment was offered at 1,490ringgit ($1=MYR3.8) a metric ton, unchanged from Wednesday, deliveredbasis in South Malaysia.RBD palm olein for August shipment was offered at $425/ton, up $2.5from Wednesday.RBD palm oil for August shipment was at $415/ton, also up $2.5.In Indonesia, the government sold 4,500 tons of CPO at a semiweeklyauction Thursday, said an official from PT Perkebunan Nusantara, theagency that sells palm oil from state-run plantations.The official said the auction price was up 15 rupiah ($1=IDR9,228) akilogram from the previous auction.PT Nubika Jaya bought 1,000 tons, ex-factory, at IDR3,656/kg.PT Musim Mas bought 1,000 tons, ex-factory, at IDR3,624/kg.PT Permata Hijau Sawit bought 2,000 tons, free on board Belawan, and500 tons, FOB Dumai, at IDR3,717/kg.Although higher than the previous auction, Thursday's prices were downIDR13 from Wednesday.RBD palm olein in Jakarta was offered at IDR4,300/kg, up IDR25 fromWednesday.