Malaysian palm oil shows no sign of relief, hits two-year high
Sunday, 31 October 2010
KUALA LUMPUR/MUMBAI, Oct 30 (Commodity Online): Palm oil prices in the key growing area, Malaysia is not showing any sign of cooling down as the fresh spell of rains has disrupted harvesting process causing a reduction in the supplies joined by the international forces like weakness in the dollar.
The futures prices in the Malaysian markets have hit a peak of two-year high. Industry experts attribute this price escalation to the weather uncertainties and weakness in US dollar, which makes the commodity cheaper for overseas buyers.
The prices in the local markets were on a slide for past two trading sessions, but the start of the annual monsoon season this month seems to have brought more rainfall hampering harvesting in major palm growing areas in Indonesia and Malaysia.
On the Bursa Malaysia Derivatives, the benchmark Jan 2011 crude palm oil contract had ended 1.6 per cent higher at RM 3064 per tonne, after rising as much as RM 3086 per tonne, touching the peak since July 28, 2008.
Industry experts anticipate further tightening of prices as edible oil and grain market sentiments remain buoyant on the back of weak dollar. The prices are believed to hit RM 3100 per tonne in near future.
Further, the export data due on November 1, will decide future trend of the prices. So far the exports have been on a lower side. As per the insiders' estimates, the exports for the first 25 days of October have shown a fall of 4 per cent.
Meanwhile, Indian imports of palm oil, the second largest after China, is also believed to mark a dent in the Malaysian exports as the domestic buyers are found to refrain from importing oils at the peaking prices.
In the recent estimates, the Solvent Extractors' Association (SEA) noted that India imported 942,257 tonnes of Palm oil in the month of September, 2010, which is feared to fall as much as 36 per cent in the wake of rising international prices.
The Indian market analysts believe that the imported crude palm oil prices seemed much higher than the domestic prices. In the Indian markets prices are hovering at Rs. 452.70 per 10 kg for December delivery on the MCX.
The futures prices in the Malaysian markets have hit a peak of two-year high. Industry experts attribute this price escalation to the weather uncertainties and weakness in US dollar, which makes the commodity cheaper for overseas buyers.
The prices in the local markets were on a slide for past two trading sessions, but the start of the annual monsoon season this month seems to have brought more rainfall hampering harvesting in major palm growing areas in Indonesia and Malaysia.
On the Bursa Malaysia Derivatives, the benchmark Jan 2011 crude palm oil contract had ended 1.6 per cent higher at RM 3064 per tonne, after rising as much as RM 3086 per tonne, touching the peak since July 28, 2008.
Industry experts anticipate further tightening of prices as edible oil and grain market sentiments remain buoyant on the back of weak dollar. The prices are believed to hit RM 3100 per tonne in near future.
Further, the export data due on November 1, will decide future trend of the prices. So far the exports have been on a lower side. As per the insiders' estimates, the exports for the first 25 days of October have shown a fall of 4 per cent.
Meanwhile, Indian imports of palm oil, the second largest after China, is also believed to mark a dent in the Malaysian exports as the domestic buyers are found to refrain from importing oils at the peaking prices.
In the recent estimates, the Solvent Extractors' Association (SEA) noted that India imported 942,257 tonnes of Palm oil in the month of September, 2010, which is feared to fall as much as 36 per cent in the wake of rising international prices.
The Indian market analysts believe that the imported crude palm oil prices seemed much higher than the domestic prices. In the Indian markets prices are hovering at Rs. 452.70 per 10 kg for December delivery on the MCX.