Palm oil declines for second day on rising output

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KUALA LUMPUR (Aug 10): Malaysian palm oil futures were down on Friday evening, after official data release showed a rise in production, though losses were capped as the gain in stockpiles was below market expectations. 

Industry regulator the Malaysian Palm Oil Board (MPOB) reported a 1.3% monthly rise in July inventory levels to 2.21 million tonnes.

The data also showed production rose 12.8% to 1.5 million tonnes, and exports were up 6.8% at 1.21 million tonnes from the previous month. 

A Thomson Reuters survey had forecast palm oil end-July stockpiles to rise 7% to a five month high of 2.34 million tonnes.  

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.2% at 2,242 ringgit (US$549.11) a tonne at the end of the trading day.

The market, however, is up 2.1% on-week, its strongest weekly gain in three. 

Trading volumes stood at 41,812 lots of 25 tonnes each.

"The market is showing concern over the production pace," said a Kuala Lumpur based trader.  

Palm oil production in Malaysia, the world's second largest producer, is set to further rise in the coming months and reach peak output levels towards the end of the year. 

Meanwhile, Malaysian palm oil shipments during Aug 1-10 rose 7.4% from the corresponding period last month, reported inspection company AmSpec Agri Malaysia on Friday.

Cargo surveyor Societe Generale de Surveillance reported a 11.8% rise for the same duration.

In other related oils, the Chicago December soybean oil contract rose slightly by 0.2%, but the January soybean oil contract on China's Dalian Commodity Exchange declined 0.1%. 

The Dalian January palm oil contract was up 0.5%.

Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.
 Palm, soy and crude oil prices at 1133 GMT

Contract Month Last Change Low High Volume
MY PALM OIL AUG8 0 -8.00 0 0 0
MY PALM OIL SEP8 2227 -8.00 2216 2247 1879
MY PALM OIL OCT8 2243 -4.00 2225 2260 17230
CHINA PALM OLEIN JAN9 4970 +24.00 4924 4992 246514
CHINA SOYOIL JAN9 5896 -6.00 5874 5918 327426
CBOT SOY OIL DEC8 28.94 +0.00 28.77 28.98 7139
INDIA PALM OIL AUG8 597.50 +4.00 593.20 599.6 1183
INDIA SOYOIL AUG8 735.6 +2.20 733.1 737 5870
NYMEX CRUDE SEP8 67.00 +0.19 66.14 67.04 131857

 Palm oil prices in Malaysian ringgit per tonne
 CBOT soy oil in U.S. cents per pound
 Dalian soy oil and RBD palm olein in Chinese yuan per tonne
 India soy oil in Indian rupee per 10 kg
 Crude in U.S. dollars per barrel
(US$1 = 4.0830 ringgit)
(US$1 = 68.8250 Indian rupees)
(US$1 = 6.8510 Chinese yuan)