Malaysian palm oil up

Malaysian crude palm oil futures ended 1.2 percent higher in light trade on Monday, as strong growth in exports and weaker-than-expected increase in reserves buoyed the market, traders said.
"The market realises that festive demand will push exports higher this month but the real surprise was that supply had increased by only half of what was originally expected," said one trader. The benchmark November contract on the Bursa Malaysia Derivatives Exchange settled up 29 ringgit or 1.2 percent, at 2,500 ($712) ringgit a tonne.
Other traded months rose between 13 and 39 ringgit. Overall volume halved to 5,864 lots of 25 tonnes each, from around 10,000 lots that change hands on a routine trading day. Dealers originally expected end-stocks for August to jump by as much as 20 percent but industry regulator Malaysian Palm Oil Board said supply only increased by 10.95 percent to 1.45 million tonnes on Monday. "Exports have been eating into reserves in August even though production has been increasing," said another trader.
"This trend is definitely going to continue into September." Asian vegetable oil demand has picked up from July as Asian buyers lock in supplies for the festive season, especially for the Muslim holy month of Ramazan and the Chinese mid-Autumn festival, both due this month.
Exports of Malaysian palm oil products for September 1-10 rose 9.3 percent to 413,299 tonnes from 378,014 tonnes shipped between August 1 and 10, cargo surveyor Interlake Testing Services said. But another cargo surveyor, Society Generate de Surveillance released a bearish estimate for the same period with exports falling 10.7 percent to 334,800 tonnes, which the market completely ignored.
"There seems to be a disparity in their calculations," said one trader in a leading plantation house. "Exports have been so strong, so the market has just shrugged off that estimate." Palm oil, used in products ranging from confectioneries and cosmetics to biofuels, is nearly 10 percent off an historic high of 2,764 ringgit reached in June.
November palm oil on Singapore's Joint Asian Derivatives Exchange was unthreaded. In the physical market, crude palm oil for September shipments in Malaysia's central region was quoted at 2,535/2,540 ringgit a tonne. Trades were done at 2,540 ringgit.