Malaysian crude palm oil futures slipped on Monday as traders await a key price outlook meeting in Kuala Lumpur this week at which analysts are expected to paint a bullish picture for the sector. Prices rose more than six percent in February alone, setting the stage for upbeat price outlooks at the Bursa Malaysia conference, given strong demand from India and China and prospects of lower soyoil supply from drought hit South America.
"Trading interest is dull as market players are waiting for cues from the Bursa Malaysia palm oil conference," said a trader with a foreign commodities brokerage. "Also, most external markets are quiet after huge moves last week." Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange dropped 0.4 percent to close at 3,246 ringgit ($1,075) per tonne.
Traded volumes were thin at 12,155 lots of 25 tonnes each, compared to the usual 25,000 lots, as most dealers were attending the palm oil conference. Technicals appeared to be negative as Reuters analyst Wang Tao said a bullish target at 3,342 ringgit per tonne has been aborted for palm oil as it will continue a correction that started at the February 28 high of 3,321 ringgit.
Demand from India, the world's largest palm oil buyer, is rather bullish, with an industry official saying imports may hit seven million tonnes in the current crop year to October - an increase of nearly 8 percent. Brent crude slipped below $124 on Monday due to demand growth concerns, but the slide was stemmed by fears of a supply crunch as Iran exports less crude on tighter Western sanctions.
In other vegetable oil markets, the US soyoil contract for March delivery was mostly unmoved in Asian trade as dealers settled positions and reaped profits after the grain hit a fresh 23-week high in a previous session. The most active September 2012 soyoil contract on China's Dalian Commodity exchange rose 0.2 percent.