Malaysian crude palm oil futures ended up 0.22 percent on Wednesday, as gains in the wheat market offered support but concerns over weaker demand weighed on the market. Traders fear palm oil demand growth may stall as India and China, the world's two largest vegetable oil consumers, rely more on soyoil imports.
"India is importing a massive amount of soyoil from Argentina. China is buying from South America for their requirement," said a trader in Kuala Lumpur. "Palm oil demand is likely to fall, due to its price parity with soyoil."
The benchmark October crude palm oil contract on Bursa Malaysia Derivatives Exchange ended up 6 ringgit to 2,676 ringgit ($844) per tonne. Volume rose to 12,394 lots of 25 tonnes each, compared to the usual 10,000 lots. But players expected gained on wheat futures on concern about Russia's drought and a possible drop in US stockpiles, would offer support on the market. US wheat futures bounced back on Wednesday, snapping a three-session losing streak, as traders took positions ahead of a key US government report expected to estimate lower global output after Black Sea crop damage.
"Wheat is the wild card for grains these days. So we can say bullish will be back," a trader in Kuala Lumpur said. Other vegetable oils markets were mixed. US soyaoil for September delivery barely moved in Asian hours while the most-active May soyaoil contract on China's Dalian Commodity Exchange eased 0.45 percent.
INDONESIA PALM TRADES: In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 7,250 tonnes of crude palm oil in an auction on Tuesday with the top price of 8,095 rupiah ($0.905) per kg, against 8,130 rupiah per kg on Tuesday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold any crude palm oil auction on Wednesday.
Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm olein - used as cooking oil - at 8,700 rupiah per kg, compared to 8,600 rupiah per kg on Tuesday. PT Astra Agro Lestari Tbk sold 1,500 tonnes of super palm kernel oil (PKO) at $1,240 per tonne.
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