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Asia palm oil: market eyes export data, rupiah

KUALA LUMPUR: Malaysian export data and movements of the Indonesian rupiah were likely to dictate direction of the Asian palm oil market this week, regional traders said.

Cargo surveyor Societe Generale de Surveillance (SGS) will release Malaysian palm oil exports figures for the first half of January on Monday.

"Confirmation of slow exports this month will certainly put the market under pressure," said a trader in Kuala Lumpur.

Traders said unofficial figures from cargo surveyor Caleb Brett showed Malaysian palm oil exports for the first 10 days of January at about 146,000 tonnes. By comparison, Malaysia exported nearly 950,000 tonnes of palm oil in December.

On Friday, Malaysia's benchmark third position palm oil futures contract ended up 28 ringgit at 1,150 ringgit ($302.63) a tonne, boosted by short covering and strong gains in Chicago soyoil futures.

Traders pegged support for the third month contract at 1,130 ringgit and resistance at 1,180.

Traders said concerns over palm oil exports to India following a hike in Indian import duty would continue to limit the market's upside in the near to medium term.

INDIAN IMPORT DUTY INCREASE IN BACKGROUND

"The increase in India's import duty will remain in the background although the market has reacted to it," said another Kuala Lumpur trader.

India, a major buyer of Malaysian palm olein, raised the import duty on refined edible oils to 27.5 percent from 16.5 percent two weeks ago. Such an increase could curb Indian demand for vegetable oils.

India was the biggest buyer of Malaysian palm oil in 1999, taking about 2.3 million tonnes or a quarter of the country's total exports, industry sources said.

The market is also awaiting the release of official crop data for December from the Palm Oil Registration and Licensing Authority (PORLA), which has been delayed to January 20 because of the Moslem Eid al-Fitr holiday.

PORLA normally issues its monthly palm oil report on the 15th of the month.

Indonesian palm olein traders said they expected players to return to the market this week.

WATCH OUT FOR RUPIAH MOVEMENTS

"It's hard to say how the market is going to behave, but I think we have to watch out for the rupiah movements. We expect the market to be active because players will start working again after the holiday," said one trader in Medan, North Sumatra.

"If demand returns and the rupiah weakens further, then we can lift the offer prices," he added.

The market has been deserted for most of last week because many players have yet to return to work after the Eid al-Fitr holiday. Some traders increased their offer prices to 2,850 rupiah per kg in the middle of last week, but were forced to reduce them again due to a lack of buying interest.

Olein was flat at 2,775 rupiah a kg in Jakarta. Crude palm oil was quoted at 2,263 and 2,308 rupiah a kg in Jakarta, based on Tuesday's weekly tender organised by the state-run marketing centre.

The centre sells crude palm oil produced by state plantations. Crude palm oil was quoted at 2,270 rupiah a kg in Medan, based on Wednesday's tender held by private traders.

The rupiah regained some ground in late Friday trade after the currency retreated in early trading.

It was quoted at 7,150/7,200 against the dollar on Friday.

Dealers said they expected rupiah trade to be confined in a range of 7,150 to 7,300 for the week, adding that political and economic uncertainty were the major factors in the market.-Reuters