Malaysian palm oil futures recovered from their lowest in 1-1/2 weeks on Friday to trade slightly higher in the evening, underpinned by an improving export demand. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 0.2 percent to 2,608 ringgit ($609.77) at the close of trade.
Earlier in the session, palm touched 2,598 ringgit, its lowest since July 25. It is down 1.8 percent for the week, its first weekly fall in five weeks. Traded volumes stood at 33,306 lots of 25 tonnes each on Friday evening. "The market is quiet today, but there is good buying from India and China," said a Kuala Lumpur-based futures trader on why prices had some support. "Exports for August might be good."
However, there are expectations of a rise in output, in line with the seasonal trend and as the lingering effects of a crop-damaging El Nino fade. A Reuters poll of nine traders, planters and analysts forecast that Malaysian output will rise 11 percent to 1.68 million tonnes, leading to gains in inventory levels by 6.5 percent to 1.63 million tonnes. Exports are seen edging up 4 percent to 1.43 million tonnes, according to the survey. Cargo surveyor data also showed that Malaysian shipments for July rose 4.1 percent, supported by stronger demand from China and Europe.
In other related oils, the October soyabean oil contract on the Chicago Board of Trade was up as much as 0.2 percent, while January soyabean oil on the Dalian Commodity Exchange fell up to 0.9 percent. The January palm olein contract fell 0.4 percent. Palm oil may slide further into a range of 2,579-2,590 ringgit per tonne, said Wang Tao, Reuters market analyst for commodities and energy technicals.
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