KUALA LUMPUR (July 15 2003) : The Malaysian Palm Oil Board (MPOB) said onSaturday the country's crude palm oil output rose 3.8 percent to 1.22million tonnes in June from a month.
It put end-June stocks at 993,171 tonnes, just below market expectationsof one million tonnes, against 946,859 tonnes at end-May.
Traders said the market had factored in prospects of exports reaching onemillion tonnes each month from July onwards on the back of steady demandfrom main consumers like India and China.
But monthly output and closing stocks are also on the rise, they said.
"Exports are already on the high side and we are entering a season whereoutput will pick up.
The general trend is that everyone is waiting for futures prices to comedown," said one trader. "The downtrend in prices will continue throughAugust."
Influential crop forecaster Ivan Wong put July output at 1.26 milliontonnes and end-month stocks at 1.11 million tonnes.
August production was estimated at 1.27 million tonnes and end-monthstocks at 1.20 million tonnes.
"I don't think we are going to reach 1,445 ringgit, which is a break outlevel. There's nothing to drive the market up right now," said anotheranalyst.
Some traders and analysts believed some refiners had held back stocks toprevent the futures market from trading below 1,400 ringgit and providesupport for the physical prices, which were trading at the 1,500-ringgitlevel.
"We do know they were trying to push up prices to the 1,500 ringgit range.But it's very hard to say whether prices can hold," said the secondanalyst.
"I know that a lot of people who get along well with the physical peoplecan still find stocks. We know there are stocks out there," headded.-Reuters