Wednesday, October 24, 2012

20121024 1450 Palm Oil Related News.

VEGOILS-Palm oil futures inch up on festival demand
Wed Oct 24, 2012 1:58am EDT
* Demand expected to pick up as festive season nears -trader
    * Stockpiles could ease on peaking production, monsoon rain
    * Palm oil still targets 2,676 ringgit -technicals
    * Palm oil prices to rise as importers seek cheaper
alternatives -Oil World

    By Anuradha Raghu
    KUALA LUMPUR, Oct 24 (Reuters) - Malaysian palm oil futures
inched up on Wednesday as investors bet on increased festival
demand for the tropical oil, although prices were locked in a
tight range due to lingering concerns over record-high stocks.
    The upcoming Diwali festival celebrated by major vegetable
oil importer India could lead buyers to snap up palm oil, easing
a growing stockpile in the world's No.2 producer.
    In addition, cargo surveyor data showing Malaysia's palm
exports grew as much as 17 percent for Oct. 1-20 from a month
ago also lifted sentiment.
    "Exports were good, but inventory is still on the high
side," said a trader with a foreign commodities brokerage in
    "But production should be toppish in the last quarter as we
move into the monsoon season, while at the same time demand is
picking up because of the festive season," he added.
    Palm oil production hits a seasonal peak in the last quarter
of the year before slowing, lifting traders' hopes this will
reduce stocks from a record high of 2.5 million tonnes in
    By the midday break, the benchmark January contract
on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at
2,556 ringgit ($836) per tonne. Prices traded in a tight range
between 2,551 and 2,570 ringgit per tonne.
    Total traded volumes stood at 9,567 lots of 25 tonnes each,
thinner than the usual 12,500 lots.
    Technical analysis showed a bullish target for Malaysian
palm oil remains unchanged at 2,676 ringgit per tonne, said
Reuters market analyst Wang Tao.
    Palm oil prices are expected to rise sharply in the coming
months on brisk buying interest as global importers seek cheaper
alternatives to competing soyoil, said Hamburg-based oilseeds
analysts Oil World on Tuesday.
    Analysts also say the Malaysian government's move to slash
export taxes on crude palm oil and scrap duty free export quotas
on the crude grade in January 2013 could benefit industry
players in the long term.
    "Despite the short-term pain for upstream players, we reckon
the change is positive for the long run as it should result in
better CPO prices after the high inventory is reduced," Kenanga
Investment's Alan Lim Seong Chun said in a research report on
    In a bullish sign for palm oil, Brent crude futures climbed
towards $109 a barrel on Wednesday, snapping a six-day losing
streak after economic data from China suggested a strengthening
recovery in the world's No. 2 oil consumer.
    In other vegetable oil markets, U.S. soyoil for December
delivery inched up 0.5 percent in early Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange fell 0.2 percent by the midday break.

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