Malaysian crude palm oil futures edged up on Thursday, spurred by positive factory data from second-largest importer China but gains were capped as export trends showed weaker demand. Malaysian export numbers eased in February, cutting palm oil gains to 3.4 percent so far this year. Some market players attributed the lower exports to a shift in orders to top producer Indonesia, which slashed export taxes for refined products.
"Exports are slightly negative because it suggests demand remains relatively weak, but it could be because we have fewer working days in February," said Ivy Ng, an analyst with Malaysia's CIMB Investment Bank. Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.5 percent to close at 3,285 ringgit ($1,095) per tonne.
Traded volumes stood at 20,170 lots of 25 tonnes each, thinner than the usual 25,000 lots. Malaysian palm oil exports for February eased 10.5 percent from a month earlier, cargo surveyor Intertek Testing Services said. Another cargo surveyor, Societe Generale de Surveillance, reported a similar downward trend, saying exports dropped 9.5 percent from January.
Market players expect February stock levels to be flat or end higher as exports seem to be slowing at a faster pace than production in second-largest palm oil producer Malaysia. Reuters technicals analyst Wang Tao said palm oil would fall to 3,212 ringgit per tonne, as indicated by a Fibonacci retracement. In other vegetable oil markets, the US soyoil contract for March delivery was flat in Asian trade and the most active September 2012 soyoil contract on China's Dalian Commodity exchange lost 1.1 percent.
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