MUMBAI (Commoditiescontrol)-
Malaysian Palm Oil Futures
Malaysian palm oil futures slid for a fourth consecutive session on Friday and hit its lowest level since August last year on rising global edible oil supplies and weak demand.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange during the week ending 22nd December fell 3.49%, or RM 89, to close at RM 2,458 (US$594.7) a tonne.
Palm oil stocks are rising in producing countries and improved soybean crop outlook for South America has weighed on global edible oil markets.
Inventory levels in Malaysia rose to their highest in nearly two years, by 16% to 2.56 million tonnes, while exports for November fell 11.9% on-month, data from the Malaysian Palm Oil Board last week showed. Further traders are estimating that inventories may rise to 2.80 million tonnes in November.
CPO stocks in Malaysia and Indonesia, responsible for 83% of global palm production reached significant surplus levels in October and November with Malaysia November stocks touching 53% above same time last year, while Indonesia October stocks surpassing 54% above same time last year. Improvement in production in Q4 of 2017, and declining exports made stocks to surge higher than that of last year, particularly in October and November in Malaysia to near 2 year high.
Slowdown in buying interest from India after the import duty was raised steeply on 17th Novemebr, pushed stock levels of RBD palmolein lower for 2 successive months in India, offering hope that buying may resume in January. India’s RBD palmolein stock at ports on 1st November was 1,50,000 tonnes which has dropped to 1,15,000 as on 1st December.
Based on stock level assessment, expectation on buying is likely to come from India in Q1 of 2018, as low price remain attractive, particularly when viewed in comparison to soybean oil.
Current spread is over US$ 163 giving palm significant advantage over soy oil. Stock levels at Malaysia & Indonesia market must go lower in Q1 of 2018 for prices to reverse from current low of RM 2458/ton to regain above RM 2600. Restocking in India, seasonal buying in China ahead of Dragon Festival in February coupled with low prices and high discount on palm makes Q1 of 2018 a promising time for prices to rise from current levels.
On the other hand the drop in production has been narrowing, from a 7.3% fall for the Dec. 1-15 period to a 2.6% drop for Dec. 1-20 versus the same periods in the prior month, data from the Southern Palm Oil Millers' Association on Thursday showed.
Domestic RBD Palmolein Scenario
RBD palmoelin price during the week ending 22nd December declined by Rs 10 to trade at Rs 610/10kg at kandla port on poor domestic demand coupled with weak global cues and also CIF price edged lower by $25 at $635/tonne.
Demand of RBD palmolein in domestic market is weak as it solidifies during winter season so most of the refiners do not use it for blending with other edible oils.
NEXT WEEK: RBD palmolein prices are likely to trade as per the trend of Malaysian Palm Oil Futures.
(By Commoditiescontrol Bureau; +91-22-40015516)
0 Comments 
Post Comment 
