Malaysian palm oil climbs

Malaysian palm oil futures rose nearly 1 percent on Friday, rebounding from a three-week low a day earlier, but fears over supplies in the world's number-two producer and a strong ringgit capped gains, traders said. The benchmark August contract on the Bursa Malaysia's Derivatives Exchange rose 23 ringgit, or 0.9 percent, to 2,522 ringgit ($723.05) per tonne, after posting its biggest day-fall in more than three weeks on Thursday.
Despite the rebound, the benchmark price closed down 5.4 percent this week, its biggest weekly loss since the end of February. Palm has struggled to hold onto gains after rising more than 50 percent this year. "Prices can only move when someone starts buying and somebody starts selling on the physical side. Unfortunately, sellers don't have cargoes to sell. In the end (the) market is just stuck like this," said a trader at a Malaysian commodities brokerage. The trader said unless production shows signs of improvement, price could drop further in coming weeks. "Everybody is still trying to sell. At current prices above 2,500 ringgit, it is still good to sell," he said.
INDONESIA PALM TRADES In Indonesia, the world's top producer of palm oil, physical trade resumed after a public holiday on Thursday, but planters were reluctant to sell due to low bids after a sharp drop in Malaysian futures a day before.
The Jakarta-based state marketing centre only sold 1,500 tonnes out of 9,000 tonnes of crude palm oil it offered in the auction at 8,200 rupiah per kg ex-factory Medan and FBO Belawan, against 8,508 rupiah on Wednesday. In another tender in Jakarta, PT Astra Agro Lestari only sold 1,500 tonnes of palm oil out of 8,750 tonnes offered.
Producers in Medan - home to Belawan port, Indonesia's main palm oil export port - sold palm oil at 8,285 rupiah per kg against 8,400-8,440 rupiah per kg in previous tender. Traders said palm producers were not in a rush to sell their stock ahead of the implementation of a 3 percent export tax on crude palm oil in June.
Meanwhile, refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 8,150 rupiah per kg, down from 8,400 rupiah per kg. In the Malaysian physical market, palm oil for May and June was traded at 2,590-2,600 ringgit per tonne in the southern and central region. There was no trades on Thursday.