950807

Asian palmoil prices

move both ways

KUALA LUMPUR: A mixed trend is expected for Southeast Asian palm and laurics oils this week, with Philippine coconut oils likely to be boosted by thin supplies and reports that a Middle East country has bought coconut oil, traders said.

Indonesian palm prices are likely to ease further on concerns over possible market operation by BULOG, the commodity regulator, while Malaysian palm traders see prices consolidating at current levels. "Coconut oil is going up, up and up," said a Filipino dealer. "Most of the positions are all over $700. Nobody is below 30 cents a lb. It seems like it is going to be bullish (this) week. Prices will be fairly strong," a Filipino trader said. Prices for nearbys climbed to $740 a tonne CIF Europe last week from around $720-$730 previously. In the U.S., prices have climbed to $0.34-$0.35 a lb. Another Filipino dealer said the next round of harvesting of coconut trees will not take place until end August or early September, thus underpinning prices for coconut products in the short-term.

A palm oil trader in Indonesia said the market is worried by possible operations to bring down domestic prices, causing major refineries to stay sidelined. "What could help is the Malaysia market. If prices rise over there, we may see some trading momentum," a trader said.

Indonesian crude palm oil prices are expected to stay around 1,300-1,315 rupiah/kg in Medan and palm olein at 1,450-1,470 rupiah/kg in Medan.

Malaysian traders said the palm market will continue to consolidate at current levels, as fresh market developments remain absent. "If any major news emerge, we may see some volatility in the market," a trader with a broking firm said. "Otherwise, prices will be stuck in a narrow range."

Uncertainty over global weather conditions and concerns about the outcome of Malaysian palmoil July output will cause players to adopt a cautious stance, traders added.

Third month, October futures closed on Friday at 1,390 ringgit a tonne. Traders see the contract's next resistance at 1,410 ringgit with immediate support at 1,380.-Reuter