Thursday, December 20, 2012
20121220 1710 Palm Oil Related News.
VEGOILS-Palm down on technicals; market eyes export tax impact
Thu Dec 20, 2012 12:57am EST
* Stockpiles set to fall next year, February's export duty
seen at zero percent-trader
* Palm oil to fall to 2,217 ringgit -technicals
* Prices seen rising to 2,800-2,9900 ringgit in first
quarter 2013 -analyst
(Updates prices, adds detail)
By Anuradha Raghu
KUALA LUMPUR, Dec 20 (Reuters) - Malaysian palm oil futures
edged lower on Thursday as technical selling weighed on prices,
although losses were curbed by investor optimism that a new
export tax next year will boost shipments of the crude grade and
Malaysia, the world's No.2 producer of the tropical oil, has
faced record high stocks since September, which seen prices fall
27 percent this year -- the worst annual performance since 2008.
The low prices have enabled the Malaysian government to set
the crude palm oil export tax for January at zero percent, which
could see Malaysia grab more market share from top producer
Indonesia. Traders are even expecting February taxes to remain
at zero given the price downtrend.
"Today the market is still trying to find a base.
Technically, they are trying to set it down below 2,300 ringgit
per tonne," said a trader with a foreign commodities brokerage.
"(But) stocks will reduce very fast starting next year
because now everybody can ship crude palm oil," he added.
By the midday break, the benchmark March contract
on the Bursa Malaysia Derivatives Exchange inched down 0.6
percent to 2,318 ringgit ($757) per tonne.
Total traded volumes stood at 16,813 lots of 25 tonnes each,
higher the usual 12,500 lots as investors went for a technical
sell down of the market.
Technical analysis showed that a bearish target of 2,217
ringgit per tonne has been established for palm oil, said
Reuters market analyst Wang Tao.
Exports in the first twenty days of the month fell a 1.9
percent compared to the period in November. Investors are
waiting for data from another cargo surveyor Societe Generale de
Surveillance which will be released later on Thursday.
Seasonally slowing production towards the year end could
give additional support to Malaysia's palm oil prices in the
first quarter of 2013, analysts say.
"The first quarter is always the "low production" season.
With the new tax structure kicking in, it should help stimulate
demand," said James Ratnam, an analyst with TA Securities in
"I expect prices to go up in the first quarter, maybe to
about 2,800-2,900 ringgit per tonne. But we have to see whether
stocks can come down to a more manageable level," he added.
Brent crude slipped on Thursday to trade around $110 a
barrel as investors took profits after recent gains as talks to
avert a U.S. fiscal crisis stalled, stoking worries about demand
in the world's biggest oil consumer.
In other competing vegetable oil markets, U.S. soyoil for
January delivery rose 0.5 percent early Asian trade
despite declines in the wider soy complex. Soybean prices have
come under pressure after China scrapped a contract for 300,000
tonnes of U.S. soy recently.
The most active May 2013 soybean oil contract on
the Dalian Commodity Exchange fell 1.5 percent.
Posted by MW Chong at 5:10 PM