Saturday, March 20, 2010

Palm oil bounces from 5-week lows

PALM oil rose yesterday, trimming a weekly decline, on concern that dry weather caused by an El Nino may curb supply in Malaysia.

The contract for delivery in June advanced as much as 1.8 per cent to RM2,580 a metric ton on the Malaysia Derivatives Exchange, and closed at RM2,577. The price ended last week at RM2,649.

Palm oil output in Malaysia, the second-largest producer, may decline between 2 and 3 per cent this year, as El Nino cuts yields, said Boon Weng Siew, president of the Malaysian Estate Owners Association, which represents small and medium-sized growers. The nation produced 17.6 million tons last year.

“That’s the first reason,” Joelianto, head of trading at Jakarta-based PT Sinar Mas Agro Resources and Technology, said by phone yesterday. Prices also gained as investors covered bets on declines, he said.

Dry weather was forecast to persist in Sabah, Malaysia’s largest palm-oil-producing region, and other parts of the country through to May, the Meteorological Department said on March 12.

The state accounted for 35 per cent of Malaysia’s output in the first two months of the year, according to data from the country’s Palm Oil Board.

El Nino, which reduces rainfall in Asia, may cause Malaysia to miss a government output forecast for palm oil of 18.1 million tons, Dorab Mistry, a director at Godrej International Ltd, one of India’s biggest vegetable oil buyers, said March 9. Output this year may be 17.2 million tons, Mistry said.

Prices may rise to as much as RM3,300 in the first half of the year amid the drop in supply, Anne Frick, vice president for research at Prudential Bache Commodities LLC, said on March 8.

The commodity may touch RM3,200 in the second half, Mistry said the following day.

Still, producers in Indonesia and Malaysia tracked by OCBC Investment Research Pte Ltd may post higher output this month as the dry weather’s impact on yields won’t be felt until six months later, Carey Wong, an analyst at the bank, said by phone today. Wong didn’t identify producers.


PRICES on the Malaysian rubber market closed lower yesterday due to lack of demand, dealers said.

"There were some enquiries from Korea," one of the dealers said, adding that the strengthening ringgit was dampening sentiment to some extent.

At noon, the Malaysia Rubber Board's official physical price for tyre-grade SMR 20 ended 1 sen lower at 1,035.5 sen per kg while latex-in-bulk dropped 1.5 sen to 738 sen per kg.

The unofficial closing price for tyre-grade SMR 20 was 2 sen higher at 1,036.5 sen per kg while latex-in-bulk declined 2.5 sen to 736.5 sen per kg.


THE price on the Kuala Lumpur Tin Market (KLTM) closed unchanged yesterday at US$17,580 per tonne on cautious sentiment, said a dealer.

"Traders were cautious as other metal prices were down on the London Metal Exchange (LME)," he said.

The LME however, saw the price of tin, rise by US$45 to US$17,795 per tonne.

At the opening bell, bids stood at 60 tonnes while offers amounted to only 56 tonnes with the market dominated by Japanese, European and local traders.

Turnover slipped to 56 tonnes against the 85 tonnes on Thursday while the premium between the KLTM and the LME narrowed to US$140 per tonne. - Agencies

Friday, March 19, 2010

Asian Crude Palm Oil Ends Up; March 1-20 Exports Expected To Rise

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday amid expectations of higher exports and consolidation of prices ahead of the weekend, said trade participants.

The benchmark June contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR2,577 a metric ton, after trading in a MYR2,536-MYR2,580 range.

"Much of the upward momentum came after prices broke through the resistance level of MYR2,550," said a Kuala Lumpur-based trader.

"The market is struggling to decide whether prices should be above or under MYR2,550, and today the bulls won," he added.

The bulls were aided by news that Malaysia's March 1-20 exports may be higher on month.
Expectations are for exports to be in the range of 850,000-873,000 tons, with market participants veering towards the higher estimate towards the market close.

During the same period last month, cargo surveyor Intertek Agri Services estimated exports at 844,865 tons while another cargo surveyor, SGS (Malaysia) Bhd., estimated exports at 865,593 tons.

Data for March 1-20 exports are likely to be released by Monday.

Bears, however, feel the increase in exports is too small to negate negative cues such as higher production and rising end-month level stocks.

A Singapore-based trader said production in March will likely be up 5%-10%, while end-March stocks may rise above 2 million tons.

In the cash market, palm olein for July/August/September traded at $802.50/ton, an executive from a Singapore-based commodities brokerage said.

Cash CPO for prompt shipment was offered MYR50 higher at MYR2,630/ton.
Open interest on the BMD was 81,225 lots Friday, down from 81,232 lots Thursday.

One lot is equivalent to 25 tons.

A total of 15,432 lots of CPO were traded versus 21,730 lots Thursday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 

Month      Close    Previous   Change    High    Low
Apr 2010   2,620    2,569      Up 51     2,620   2,576
May 2010   2,583    2,550      Up 33     2,592   2,548
Jun 2010   2,577    2,535      Up 42     2,580   2,536
Jul 2010   2,565    2,530      Up 35     2,568   2,526 
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

CPO futures easier on technical selling


CRUDE palm oil (CPO) futures on Bursa Malaysia Derivatives closed lower yesterday on technical selling, a dealer said.

"The market was influenced by external factors, despite the fact that there is potential for CPO outputs to decline amid the dry weather," he said.

Johor and Sabah have experienced a prolonged dry spell driven by the El Nino weather condition that can axe yields and trigger a supply squeeze.

April 2010 shed RM55 to RM2,569 per tonne, May 2010 declined RM54 to RM2,550, June 2010 fell RM60 to RM2,535 and July 2010 eased RM53 to RM2,530 per tonne.

"It's more on technicals. The funds have a bearish view on the commodity markets and it's hitting palm oil," a trader based in Kuala Lumpur said.

Another trader said: "Crude oil has started to fall now and it's triggering profit-taking all over the place."

Overall volume rose to 21,730 lots from 15,515 lots on Wednesday while open interest shed to 81,232 contracts from 84,059 contracts previously.

On the physical market, March South went down to RM2,580 per tonne from RM2,630 per tonne on Wednesday.


THE rubber market closed mixed to marginally easier in the absence of any market moving factors.

The market took the cue from the Tokyo rubber futures market which slipped yesterday, tracking price falls in other commodities.

At noon, the Malaysia Rubber Board’s official physical price for tyre-grade SMR 20 ended 1 sen higher at 1,036.5 sen per kg while latex-in-bulk was flat at 739.5 sen per kg.

The unofficial closing price for tyre-grade SMR 20 was 2.5 sen lower at 1,034.5 sen per kg and latex-in-bulk eased one sen to 739.0 sen per kg.


TIN price rose US$100 to close at US$17,580 (US$1.00 = RM3.34) per tonne on the Kuala Lumpur Tin Market (KLTM), a dealer said yesterday.

The rise was in line with the performance on the London Metal Exchange (LME), where the metal increased US$195 to close at US$17,750 per tonne.

"There was also more demand in the local market," said the dealer.

At the opening bell, bids stood at 110 tonnes while offers amounted to only 50 tonnes with the market dominated by Japanese, European and local traders.

Turnover jumped to 85 tonnes versus 46 tonnes on Tuesday and the premium between the KLTM and the LME narrowed to US$185 per tonne. - Agencies

Thursday, March 18, 2010

Nestle Drops Indonesia’s Sinar Mas As Palm Oil Supplier

Nestle, the world’s largest food maker, has dropped Sinar Mas Agro Resources & Technology as a supplier of palm oil, after environmental group Greenpeace led protests accusing the latter of destroying Indonesian rainforests.
However, Greenpeace said Nestle’s concession doesn’t go far enough in ensuring its products are not tainted by palm oil that’s been produced as a result of forest destruction.
Nestle has replaced Sinar Mas with an unidentified supplier, the company said in a statement released Thursday. The company said it bought palm oil from Sinar Mas only for manufacturing in Indonesia, and no palm oil bought from Sinar Mas has been used for manufacturing in other countries.
Another food giant, Unilever NV (UN), dropped Sinar Mas as one of its palm oil suppliers three months ago.
Greenpeace on Wednesday published a report accusing Sinar Mas of destroying rainforests and orangutan habitats to set up its palm oil plantations. The organization subsequently launched protests at Nestle's headquarters and factories in the U.K., Germany and the Netherlands.
Following Nestle's action to drop Sinar Mas, Greenpeace said Thursday that palm oil produced by Sinar Mas would continue to flow through Nestle's supply chain as it buys palm oil from third party suppliers like Cargill, which Greenpeace said purchases from Sinar Mas.
Nestle said it is "making sure that companies, such as Cargill, understand our demands for palm oil which is not sourced from suppliers which destroy rainforests."
Sinar Mas Agro denied that its palm oil plantations were damaging the environment.
"We are committed to applying responsible land clearing and the best practice of farming management in all our plantations," President Director Daud Dharsono said Thursday.
Dharsono did not disclose how much palm oil the company supplies to Nestle.
Unilever, the other company that has banned purchases from Sinar Mas, accounted for 3% of Sinar Mas' total annual palm oil sales of $1 billion, which Dharsono in an interview in December had characterized as "insignificant."
During that interview, Dharsono said the bulk of Sinar Mas's customers, who are based in India and China, won't be swayed by Unilever's actions.
Nestle said it is committed to using only "certified sustainable palm oil" by 2015.
Of the 45 million tons of annual, global crude-palm-oil output, only 2.3 million tons has been certified by the palm oil watchgroup Roundtable for Sustainable Palm Oil as having been produced through sustainable methods.
Of the 2.3 million tons, Indonesia, the world's largest CPO producer, accounts for only 400 tons.

-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

(END) Dow Jones Newswires
March 18, 2010 05:49 ET (09:49 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.

Crude Palm Oil Ends Down On Weak Crude Oil, Soyoil

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Thursday as crude oil and soyoil futures weakened, trade participants said.
Concerns that recent high prices are turning away Indian buyers also pushed prices into negative territory.
The benchmark June contract on Bursa Malaysia Derivatives ended MYR60 lower at MYR2,535 a metric ton, after trading in a range of MYR2,528-MYR2,587.
By the end of trade on the BMD, May Brent crude on London's ICE futures exchange was trading $0.66 lower at $81.30 a barrel.
May soyoil on the e-CBOT was down 65 points at 39.19 cents a pound.
Weak external cues were compounded by fears that demand may be slackening as a result of current prices.
"Some exporters feel current prices are on the high side," turning away Indian buyers, a Kuala Lumpur-based trader said.
He added that demand from Indian buyers would likely increase if the benchmark contract falls to around MYR2,500 from its recent levels above MYR2,600.
Cargo surveyors are due to release data for Malaysia's March 1-20 palm oil exports by Monday.
"Participants will likely start speculating on the level of exports tomorrow. Although exports are feared to be weak, (the) end-month stocks level and production are still bullish, so that should negate some of those fears," said another Kuala Lumpur-based trader.
In the cash market, palm olein for July/August/September traded at $800/ton, an executive from a Singapore-based commodities brokerage said.
Cash CPO for prompt shipment was offered MYR50 lower at MYR2,580/ton.
Open interest on the BMD was 81,232 lots Thursday, down from 84,059 lots Wednesday. One lot is equivalent to 25 tons.
A total of 21,730 lots of CPO were traded versus 15,515 lots Wednesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: 

Month      Close    Previous   Change    High    Low
Apr 2010   2,569    2,624      Dn 55     2,605   2,561
May 2010   2,550    2,605      Dn 55     2,596   2,539
Jun 2010   2,535    2,595      Dn 60     2,587   2,528
Jul 2010   2,530    2,583      Dn 53     2,570   2,520 
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

(END) Dow Jones Newswires
March 18, 2010 06:52 ET (10:52 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.

Palm futures get boost from rising crude price

CRUDE palm oil (CPO) futures on Bursa Malaysia Derivatives closed higher yesterday in line with the uptrend of other commodity prices, dealers said.

The CPO futures prices received a boost from crude oil price which rose to US$82 per barrel in trading.

At the close of CPO futures trading, the April 2010 contract added RM19 to RM2,624 per tonne, May 2010 gained RM18 to RM2,604 per tonne, June 2010 increased RM26 to RM2,594 per tonne and July 2010 rose RM30 to RM2,583 per tonne.

Overall volume declined to 15,515 lots from 20,673 lots Tuesday, while open interest rose to 84,059 contracts from 82,407 contracts previously.

On the physical market, March South climbed to RM2,630 per tonne from RM2,605 per tonne Tuesday.


THE Malaysian rubber market closed mixed yesterday in quiet trading following a technical correction.

However, rubber prices on other main regional markets moved upwards in line with crude oil price, the dealer said.

At noon yesterday, the Malaysia Rubber Board's official physical price for tyre-grade SMR 20 ended two sen lower at 1,035.5 sen per kg while latex-in-bulk fell 0.5 sen to 739.5 sen per kg.

The unofficial closing price for tyre-grade SMR 20 added two sen to 1,037.0 sen per kg and latex-in-bulk was flat at 740 sen per kg.


TIN price on the Kuala Lumpur Tin Market (KLTM) gained US$30 to close at US$17,480 per tonne yesterday, a dealer said.

The rise was in line with the performance on the London Metal Exchange (LME), where the metal increased US$105 to close at US$17,555 per tonne.

"Buyers were more cautious on the KLTM than the LME," said the dealer.

At the opening bell, bids stood at 50 tonnes while offers amounted to 40 tonnes with the market dominated by Japanese, European and local traders.

Turnover dropped to 46 tonnes versus 55 tonnes on Tuesday and the premium between the KLTM and the LME narrowed to US$280 per tonne. - Bernama

Wednesday, March 17, 2010

Crude Palm Oil Ends Up On Higher Soyoil, Crude

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Wednesday tracking positive crude oil and soyoil futures in after-hours trade.

However, a lack of fresh local cues prevented CPO prices from breaking the MYR2,600 resistance, prompting sluggish, rangebound trade.

The benchmark June contract on Bursa Malaysia Derivatives ended MYR26 higher at MYR2,595 a metric ton, after trading in a MYR2,576-MYR2,600 range.

Higher soyoil futures in the morning prompted CPO prices to rise to MYR2,600 but the market's inability to break that resistance level prompted sluggish trade for the rest of the day, said traders.

"CPO prices barely moved today and there were hardly any trades on the cash market," said a Kuala Lumpur-based trader.

By the end of trade on the BMD, May soyoil on the electronic Chicago Board of Trade was up 20 points at 39.57 cents a pound.

May Brent crude on London's ICE Futures exchange was up $0.77 at $81.30 a barrel.

Foremost on many participants' minds were fears that palm oil's discount to rival soyoil is diminishing, and this prevented CPO prices from breaking out of rangebound trade.

Palm oil used to average $70-$100/ton less than soyoil, and around such levels it was seen as a cheap alternative to soyoil, said another Kuala Lumpur-based trader.

However, the trader added the discount has since fallen to $10/ton, with fears that palm oil may soon outstrip soyoil.

"That's making it hard for CPO prices to rise, as the market fears higher CPO prices would result in importers switching to soyoil," said the trader.

The trader added India would be the market most likely to switch to soyoil should the discount fall even lower.

India is one of Malaysia's largest buyers of CPO.

In the cash market, palm olein for July/August/September traded at $805/ton, an executive from a Singapore-based commodities brokerage said.

Cash CPO for prompt shipment was offered MYR25 higher at MYR2,630/ton.

Open interest on the BMD was 84,059 lots Wednesday, up from 82,648 lots Tuesday. One lot is equivalent to 25 tons.

A total of 15,515 lots of CPO were traded versus 20,774 lots Tuesday.

Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:

Month Close Previous Change High Low
Apr 2010 2,624 2,605 Up 19 2,627 2,611
May 2010 2,605 2,586 Up 19 2,612 2,590
Jun 2010 2,595 2,569 Up 26 2,600 2,576
Jul 2010 2,583 2,553 Up 30 2,590 2,573

-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

(END) Dow Jones Newswires

March 17, 2010 06:50 ET (10:50 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

Weaker in cautious trade

SHARE prices on Bursa Malaysia closed lower yesterday on profit-taking in recent gainers, with trading cautious as most investors stayed on the sidelines awaiting fresh leads, dealers said.

At the close, the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) was 0.81 point lower at 1,298.86. It had opened 0.34 point better at 1,300.

The index was unable to hold on to the crucial 1,300 level. Dealers said investors were reluctant to take heavy positions ahead of the outcome of the US Federal Reserve's policy meeting later in the day.

A dealer said most market players expect the US to hold interest rates near zero and keep its promise to maintain rates low for a long time to help support the domestic economy. "However, investors will be looking for clues on future moves to guide markets."

The Finance Index slipped 24.85 points to 11,549.91 and the Plantation Index declined 8.73 points to 6,360.09. The Industrial Index, however, was 14.69 points higher at 2,631.03.

The FBM Emas Index eased 4.73 points to 8,722.93, the FBM70 dipped 10.69 points to 8,504.65 while the FBM Ace Index decreased 15.91 points to 4,189.68.

Decliners led advancers by 361 to 290 while 292 counters were unchanged with 402 untraded and 32 others suspended.

The day's turnover was lower at 678.60 million shares worth RM1.06 billion against Monday's 764.55 million shares valued at RM1.10 billion.

Of the heavyweights, Maybank declined 1 sen to RM7.31, CIMB Group fell 12 sen to RM13.56 and Maxis dipped 6 sen to RM5.29 while Sime Darby gained 7 sen to RM8.55.

Among actives, Frontken Corp-Warrants was 5 sen higher at 5.5 sen while Nam Fatt Corp and Berjaya Corp-LC dropped 6.5 sen and 5.5 sen respectively to 12 sen and 98.5 sen.

Turnover on the main market fell to 583.32 million shares valued at RM1.03 billion from 639.74 million shares valued at RM1.05 billion previously.

The ACE Market volume declined to 51.66 million units worth RM12.68 million from the 65.28 million units worth RM20.30 million previously.

Warrants were lower at 23.32 million shares valued at RM3.10 million from 32.18 million units valued at RM5.16 million previously.

Consumer products accounted for 26.24 million shares traded, industrial products 116.65 million, construction 68.14 million, trade and services 205.91 million, technology 34.72 million, infrastructure 9.70 million, finance 47.20 million, hotels 5.39 million, properties 48.28 million, plantations 19.42 million, mining 2,000, REITs 1.59 million and closed/fund 85,500. -- Bernama

Palm futures end lower on technical buying

MALAYSIAN palm oil futures ended off one-month lows yesterday on technical buying and production concerns in the world's No.2 producer of the vegetable oil.

Benchmark June crude palm oil futures on the Bursa Malaysia Derivatives Exchange settled down RM6 at RM2,569 a tonne after going as low as RM2,500, a level not seen since Feb. 12.

Overall traded volume doubled to 20,673 lots of 25 tonnes each.

"There is a retracement as the market has been oversold for the past two days," said a trader with a foreign brokerage in Kuala Lumpur. "The dry spell is still a concern, it may hit production further this month."

Another trader said the market was on the lookout to see if stocks in Malaysia will come down further in March. He pegged the market's trading range at between RM2,500 and RM2,620 a tonne.

Crude oil prices steadied below US$80 (US$1.00 = RM3.34) a barrel in Asian hours, after a fall of nearly 2 per cent in the previous session, its biggest one-day fall in more than two weeks, as the market awaited the outcome of organization of the petrolieum exporting countries and central bank meetings.

Firm oil supported US soyoil futures that also rose on loading delays in Brazil as supplies from the ongoing harvest and rainy weather overwhelmed transportation capacity in the world's second largest soy exporter.

Tuesday, March 16, 2010


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1. WIJAYA-WA -------> 0.19 CENTS
2. HEXAGON-WA -----> 0.23 CENTS
3. FOCAL--------------> 0.225 CENTS

Happy Trading....

Crude Palm Oil Ends Marginally Lower In Choppy Trade

Crude palm oil futures on Malaysia’s derivatives exchange ended marginally lower in volatile trade Tuesday amid both long liquidation and fresh buying.

Refined, bleached and deodorized palm olein’s narrowing discount to crude soyoil futures and bearish cues from crude oil weighed on CPO futures, trade participants said.

The new benchmark June contract on Bursa Malaysia Derivatives ended MYR6 lower at MYR2,569 a metric ton, after falling as much as 1.1% to a one-month low of MYR2,546/ton.

Prices swung between positive and negative territory in the morning session as some investors liquidated positions (only) to buy again,” a Malaysia-based exporter said.

There were concerns China may tighten its monetary policy to quell inflation, and a “rate hike could potentially be a dampener (for CPO futures),” said Carey Wong, a senior analyst at Singapore-based OCBC Research.

“The earlier concerns (about) a drier-than-usual period in the first half have also been eased somewhat by the early arrival of rains…adding to the bearish sentiment in the market,” Wong said.

Unlike many vegetable oil crops that are irrigated, palm oil is rain-fed and is highly dependent on weather conditions.

Adding to the volatility, some investors squared off positions ahead of key data from the U.S., including the results of a Federal Open Market Committee meeting on interest rates, many traders said. The outcome may have an impact on the dollar, which in turn will affect prices of most commodities, including palm oil.

In the cash market, palm olein for July/August/September traded at $792.50/ton and $795/ton, an executive from Singapore-based commodities brokerage said.

Cash CPO for prompt shipment was offered MYR25 lower at MYR2,605/ton.

Open interest on the BMD was 82,648 lots Tuesday, up from 81,748 lots Monday. One lot is equivalent to 25 tons.

A total of 20,774 lots of CPO were traded versus 22,165 lots Monday.

Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:

Month Close Previous Change High Low
Apr 2010 2,605 2,609 Down 04 2,618 2,585
May 2010 2,586 2,590 Down 04 2,602 2,562
Jun 2010 2,569 2,575 Down 06 2,586 2,546
Jul 2010 2,553 2,559 Down 06 2,575 2,535

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;

(END) Dow Jones Newswires

March 16, 2010 06:57 ET (10:57 GMT)

Palm lower as vegetable oils lose appeal

PALM oil futures in Malaysia declined yesterday as crude oil traded below US$80 a barrel, reducing the appeal of vegetable oils processed to make biodiesel.

The contract for May delivery lost as much as 1.3 per cent to RM2,597 a metric ton on the Malaysia Derivatives Exchange before ending at RM2,612.

Crude oil for April delivery fell 0.2 per cent to US$78.54 a barrel on the New York Mercantile Exchange at 5pm Jakarta time as analysts forecast US crude supplies increased a fifth week, signaling slowing demand in the world’s largest energy consumer.

“Some funds look at crude oil” prices as a gauge in determining whether it makes sense to use more biodiesel made from palm oil, Donny Khor, a senior president for futures & options at OSK Investment Bank Bhd, said by phone from Kuala Lumpur yesterday.

“It’s basically the speculative element.”

May-delivery soybean oil, which competes with palm oil for use in cooking oil and biodiesel, lost 0.2 per cent to US$39.8 cents a pound at 5pm Jakarta time in after-hours electronic trading on the Chicago Board of Trade.

Environmental issues will also cloud the prospects for palm oil demand as feedstock for biodiesel, according to a report by Fortis Bank Nederland/VM Group yesterday.

“In the medium term, demand growth, especially in more mature economies, will be increasingly tied to the use of CPO as a fuel feedstock,” Fortis Bank Nederland/VM Group said.

“Yet there is a growing consumerist backlash against CPO, especially for biodiesel, based on concerns that its production is doing serious environmental harm.”

Unilever said on December 11 that it suspended purchases from Sinar Mas Group, Indonesia’s biggest palm oil producer, until the company can prove that its plantations aren’t contributing to deforestation in Asia.

Unilever has also blacklisted another Indonesian company, PT Duta Palma, for similar reason, the Independent reported in February 22.


Monday, March 15, 2010

Crude Palm Oil Stumbles On Long Liquidation, Profit-Taking

Crude palm oil futures on Malaysia’s derivatives exchange fell Monday, extending a downward correction from the highs hit a week earlier amid profit-taking and liquidation of long positions.

Broad weakness in commodities due to concerns about possible further monetary tightening in China continued to set the tone for the market, but strong export growth and seasonally low supply may help to limit palm oil's losses, trade participants said.

The benchmark May contract on Bursa Malaysia Derivatives ended MYR59, or 2.2%, lower at an intraday low of MYR2,590 a metric ton.

Weak buying interest in the cash market, affected by the sharp recent rise in prices, also damped market sentiment. On March 8, the May contract ended at MYR2,709/ton, its highest level since Jan. 6.

The fall in CPO futures below the psychological level of MYR2,600/ton during the afternoon session may be an indication that the market is vulnerable to further losses, a Kuala Lumpur-based trading executive said.

He pegged next support at MYR2,520 if the slide continues Tuesday.

While palm oil's supply-and-demand fundamentals are tight, frequent bouts of long liquidation can't be ruled out, an analyst in Singapore said.

However, he said, "The low production season and a pickup in exports may underpin CPO futures and prevent any sharp fall (in futures)."

In February, CPO output fell 12.5% from the previous month to 1.16 million tons, according to data from the government-linked Malaysian Palm Oil Board dated March 10.

On Monday, cargo surveyor SGS (Malaysia) Bhd. said palm oil exports in the March 1-15 period rose 5.1% from a month earlier to 638,548 tons, while Intertek Agri Services said exports in the period were up 18% at 669,227 tons.

In the cash market, palm olein for May/June traded at $810/ton, and July/August/September at $797.50/ton, said a Singapore-based trading executive.

Cash CPO for prompt shipment was offered MYR40 lower at MYR2,630/ton.

Open interest on the BMD was 81,748 lots Monday, down from 82,037 lots Friday. One lot is equivalent to 25 tons.

A total of 22,165 lots of CPO were traded versus 17,096 lots Friday.

Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:

Month Close Previous Change High Low
Mar 2010 2,630 2,670 Down 40 2,630 2,630
Apr 2010 2,609 2,660 Down 51 2,641 2,609
May 2010 2,590 2,649 Down 59 2,631 2,590
Jun 2010 2,575 2,631 Down 56 2,615 2,575

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;

(END) Dow Jones Newswires

March 15, 2010 06:59 ET (10:59 GMT)

Palm Oil Declines on Crude, South American Soybean Crop Concern

Palm oil dropped the most in almost two months as crude oil declined and on concerns record soybean supplies from South America will reduce the need for substitutes.

May-delivery futures lost 2.2 percent to close at 2,590 ringgit ($780) a metric ton, the lowest level since Feb. 24, on the Malaysia Derivatives Exchange. Crude for April delivery was down 0.4 percent at $80.88 a barrel in New York.

“A slight pullback could be under way this week” for crude oil, and with palm oil failing to advance beyond 2,726 ringgit last week, “follow-through selling can be expected,” a technical report by RHB Research Institute Sdn. said today.

Soybeans for May delivery slid as much as 0.4 percent to $9.2175 a bushel in Chicago and traded at $9.24 at 6 p.m. Singapore time. Prices may drop below $9 a bushel as China, the biggest importer, switches more cargoes from the U.S. to South America, according to a Bloomberg survey on March 12.

Brazil’s soybean processors raised their crop forecast for the current marketing year to 67.6 million tons. The outlook for production in the year that started Feb. 1 was raised from 65.2 million tons estimated on Jan. 26, Abiove, as the association is known, said March 12.

In the physical market in Indonesia, the largest palm oil grower, 5,000 tons was sold in auctions. Palm oil for delivery from Belawan port fetched 7,606 rupiah a kilogram ($830 a ton), compared with 7,777 rupiah on March 11. The country failed to sell 8,750 tons on March 12 because of low bids.

Sales from Malaysia, the second-largest producer, climbed 18 percent in the first 15 days of this month to 669,227 tons, Intertek said. Shipments to China surged 29 percent to 191,059 tons, and to India and the subcontinent by 25 percent to 165,456 tons, Intertek said.

India Demand

Overall exports gained 5.1 percent to 638,548 tons in the period, according to Societe Generale de Surveillance.

India imported 2.39 million tons in the four months ended February, up from 2.33 million tons a year earlier, according to data from the Solvent Extractors’ Association of India today.

Inbound shipments of vegetable oils may reach a record 9.1 million tons in the year ending Oct. 31, up from 8.66 million tons a year ago, a processor’s group said March 12. Purchases will include 7 million tons of palm oil-products, said BV Mehta, co-chairman of the crop committee of the Central Organization for Oil Industry & Trade.

In China, the largest edible oils user, September-delivery palm oil dropped 1 percent to 6,848 yuan a ton on the Dalian Commodity Exchange while soybeans lost 0.4 percent to 3,800 yuan.


–Editor: Ravil Shirodkar

To contact the reporters on this story: Claire Leow in Singapore at; Yoga Rusmana in Jakarta at

To contact the editor responsible for this story: James Poole at

Palm Oil Refineries Should Venture Into More Downstream Value-Added Products

Malaysian palm oil refineries should venture into more downstream value-added products to remain profitable, said Felda Vegetable Oil Products Sdn Bhd Chief Executive Officer Ismail Hasan.

“It is important to produce and export more value-added products as it would help increase margins for refineries.

“The price of refined products do not move in tandem with the commodity’s high price.

“Therefore, with more value-added products produced such as margerine, soaps and cosmetics, refiners would be able to survive comfortably,” he told a Bernama roundtable discussion on palm oil on Thursday.

The roundtable was moderated by Bernama Editor-in-Chief Datuk Yong Soo Heong as well as Deputy Editor-in Chief, Puan Salbiah Said and Assistant Editor, Cik Siti Hawa Othman.

He pointed out that spiralling crude palm oil prices was good for the industry but not necessarily so for refiners as it usually resulted in higher cost for them.

Ismail also said Malaysia’s current refining capacity was about 22 million tonnes while the country’s output last year stood at 17.6 million tonnes.

Refineries were currently operating at 70 per cent capacity.


Soyoil Subsidies Create Artificial Price, Says MPOC

Soyoil is sold at a premium to palm oil owing to market-distorting agricultural subsidies given to US and European farmers by their governments, according to the Malaysian Palm Oil Council (MPOC).

It is not due to any inability of the Malaysian commodity to compete on the world stage, said MPOC chief executive officer Tan Sri Dr Yusof Basiron.

Yusof said it was difficult for palm oil to be at par with soyoil or other oils as these were being highly supported through their countries’ subsidy systems.

“So it’s not because soyoil is good that the price is high, but because of the subsidy system,” he told reporters after a roundtable discussion on the palm oil industry organised by Bernama on Thursday.

The discussion was moderated by Bernama editor-in-chief Datuk Yong Soo Heong, deputy editor-in-chief Salbiah Said and assistant editor Siti Hawa Othman.

Yusof said the subsidy system was artificially causing the price of soyoil to be higher.

On Wednesday, the US Senate passed a tax bill that included a one-year extension of the US$1 per gallon biodiesel tax credit, retroactive to Jan 1.

As reported, biodiesel production came to a virtual stop after the credit expired Dec 31 when senators could not agree on legislation that would have kept it alive.

Yusof also said the soyoil industry was crying for support in order to create good demand and high price needed by soybean farmers.

However, oil palm cannot have such a support system as there is no subsidy for palm oil in the country, he said.

“It should not be regarded that we are the discount. We are the natural price, they are the inflated price because of their subsidies,” he added.

Oil palm planters in Peninsular Malaysia have to pay windfall tax when palm oil prices go beyond RM2,500 per tonne in the cash market. Planters in Sabah and Sarawak, however, only need to pay the windfall tax if the price crosses RM3,000 per tonne.

Yusof said even with palm oil prices between RM2,600 and RM3,000, the industry was still getting the necessary income.

“We are not complaining about the price and I think everybody will be happy getting their necessary income from this industry,” he said.

According to him, oil palm is the best crop and is also competitive as it yields 10 times more oil per hectares a year compared to soybean.

“This high yield is contributing to our competitive pricing, meaning that we can compete with those costly oils in the world market,” he said.

Yusof said that due to its competitiveness, palm oil could not be replaced by soyoil or rapeseed oil.

Currently, he said, palm oil was competing with soyoil as the prices were narrowing with palm oil having a discount of about US$100 per tonne to soyoil.

The discount was likely to narrow further and palm oil could even trade at a slight premium soon, Oilworld’s editor-in-chief Thomas Mielke said recently at the Palm & Lauric Oils Conference held here.

A record soybean harvest this year may have some dampening effect on soyoil prices as palm oil prices strengthened on bullish supply fundamentals, he said.


FBM KLCI in correction mode

Investors should take profit on core banking stocks AFG, AMMB, CIMB, Maybank, Public Bank and RHB Capital ahead of correction, says a head of research

Strong breakout rallies on core banking and plantation stocks last week shored up the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to a fresh two-year high, before profit-taking correction towards the end of the week forced stock prices to close off best.

The FBM KLCI added 11.42 points or 0.88 per cent last week to settle at 1,311.20, with Public Bank (+50 sen), PPB Group (+RM1.34) and CIMB (+12 sen) dominating gains to contribute more than four-fifth's of the index's rise. Daily average traded volume and value was marginally lower at 880.4 million shares worth RM1.6 billion, compared with 884.7 million shares worth RM1.53 billion in the previous week.

The FBM KLCI hit the year's high of 1,334.34 last Thursday and the positive sentiment that drove up the market was not confined to the Malaysian market alone. Even the US' S&P 500 hit a 17-month high last week, driven by positive economic and corporate data.Signs of a recovery in the US labour market, improving retail sales, Citigroup's affirmation of sustainable profits and renewed strength in M&A activities instilled hope in the economic recovery process.

The underlying strength in the local equity market appears sustainable but its overbought condition could lead to technical correction this week led by core banking stocks. Maybank could top the correction list as rumours about the simultaneous resignations of three senior executives may fuel speculations about lack of cohesion and direction at the top level. Other banking stocks and recent outperformers like glove stocks may undergo similar corrections due to their overbought conditions.

Investors should take this opportunity to do selective nibbling on some picks that have good long-term earnings growth potential.

Notwithstanding the current improvement in the economy and equity market, external risks like the European debt crisis and an overheating in China's economy are still lurking beneath the surface that could act as immediate-term dampeners for the market.

On the European side, Greece is confident that its austerity measures will put the economy back on the right path without external help and the dwindling yield premium for its 10-year note echoed that markets concurred but it is still high compared to historical levels. The worries about sovereign debt defaults have eased for now but could return as Greece austerity measures are just "fill-gap" measures that would cripple private consumption and investment if the public spending are not directed towards revenue generating ventures.

Meanwhile, in China inflationary pressures are on the rise and its recent exports and property prices data suggest that more stringent tightening measures could be introduced in the future that could affect market sentiment.

The bright spot here is that a possible appreciation of the yuan could lead to further strengthening in the ringgit.

Locally, our economic standing is improving and for it to be sustained we have to be more proactive and decisive in the decision-making process while improving on the delivery mechanism.

Backpedalling on important decisions that will enhance the competitiveness of the nation in the long run due to worries about short-term repercussions should be discontinued immediately.

If unpopular measures like increasing electricity tariff and floating pump prices are delayed for socio-economic reasons, the "opportunity lost" should be recovered through other measures like removal of "rent-seekers" in government contracts, open tenders for government projects, proper checks and balances in the public administration system to avoid wastage of public funds in unworthy projects or cost overruns, and removal of restrictive and or lopsided taxes/policies that benefit a small group at the expense of wider population.

Technical outlook

In the index futures market on Bursa Malaysia Derivatives, spot month March traded was up 13 points, or 1 per cent, week-on-week, improving to a 4.8-point premium to the cash index, against the 3.22-point premium the previous Friday.

Bursa Malaysia began trading last week on a very bullish note, with banking stocks staging strong breakout rallies following Bank Negara's decision to raise the Overnight Policy Rate (OPR) by 1/4 basis point to 2.25 per cent which will boost profit margins for most banks. The strong rally on Wall Street the previous Friday sparked by the lower-than-estimated unemployment rate also helped sentiment and brought out the bulls from hibernation.

However, profit-taking alternated with bargain-hunting for the following three days, with plantation stocks taking the baton from banks to push higher after bullish crude palm oil price forecasts by industry experts in the annual Palm and Lauric Oils Conference.

Nonetheless, trading sentiment ahead of the weekend was dampened by follow-through profit-taking interest in rubber glove stocks due to concerns their recent strong share price performance was overdone.

The FBM KLCI staged bullish breakout to peak at a new two-year high of 1,334.34 on Thursday morning, but subsequently fell to the week's low of 1,308.79 by late Friday morning to register a mildly wider 25.55-point trading range last week, against 24.22 points the previous week.

Among other indices, the FBM-EMAS Index advanced 68.45 points or 0.78 per cent last week to close at 8,805.73, while the FBM-Small Cap Index gained 28.78 points, or 0.27per cent to 10,806.25.

A sell signal triggered by the daily slow stochastics indicator for the FBM KLCI in the overbought zone implies further downward correction early this week, but the weekly indicator's bullish signal remained intact.

The 14-day Relative Strength Index (RSI) has similarly dipped below the overbought level for a sell signal with a current reading of 62.41, but the 14-week RSI rose higher to a reading of 68.88 as of last Friday.

The daily Moving Average Convergence Divergence (MACD) trend indicator sustained its positive trending signal, but the upward gradient is dissipating, while the weekly MACD continued to show a bullish convergence.

As for the 14-day Directional Movement Index (DMI) trend indicator, the +DI and -DI lines are contracting towards each other, with the ADX line ascending upwards to suggest a strengthening up-trend.


Sell signals on the daily slow stochastics and 14-day RSI indicators for FBM KLCI suggest further downside risk this week, but this is positive to neutralise the technically overbought condition brought about by last week's breakout rally.

Meanwhile, weekly momentum and trend indicators remain bullish, implying further upside potential in the medium term. As such, a correction later this week will be ideal for investors who sold the breakout rally to re-enter the market for medium-term gains going forward.

As for the best support levels to re-enter, look for immediate support upon a break below 1,308 at the 1,300 psychological level, with strong support available at 1,288, mirroring last year's high.

In any case, a further dip will find stronger support at the 50-day moving average, currently at 1,281. The 100-day moving average at 1,272 will be a concrete floor limiting downside risk. On the flipside, expect immediate resistance at 1,325, last Monday's high, with last week's high of 1,334 as a more significant resistance. A confirmed breakout will see the immediate upside of 1,341 and 1,351, the 1.382 and 1.5 Fibonacci Projection targets being challenged.

Chart-wise, it is advocated that investors take profit on core banking stocks AFG, AMMB, CIMB, Maybank, Public Bank and RHB Capital ahead of correction towards their middle or lower Bollinger bands where they may opt to re-enter.

Look for bargains in Genting Bhd, IOI Corp and Sime Darby stocks as these blue chips remain major laggards and are prime candidates for recovery. On lower liners, accumulate rubber glove makers Adventa, Latexx, Supermax, 3A Resources, Leader Universal and L&G on any further sharp declines towards stronger supports for medium-term gains.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

CPO futures --Test for RM2,630 support level

OBSERVATIONS: The RM2,700 to RM2,725 a tonne area has become a zone of fear - fear that long (buy) positions entered into within that zone would be money-losing propositions.

That's because that's the area where, last week, not only many dreams of riches have turned to dust, many market players suffered heavy losses to boot!

The problem was because, try as as it did, this market just could not breach the long-term RM2,725 overhead resistance level.

And it was not for want for trying. This market made passes, for four consecutive days (Monday through Thursday), above the RM2,700 level. But although it kept plugging away it got stonewalled in every attempt it made to breach the RM2,725 resistance level.

Market bulls, exhausted and frustrated by the end of last week, changed tack last Friday, attempted to nail down profits by liquidating long contracts and pocketing whatever profits were still available for the taking. In the event the May 2010 contract slumped, settling at RM2,649 for a RM21 or 0.79 per cent loss over the week.

What happened is that the RM2,725 overhead resistance level has become even more resistant - maybe even super resistant - to future attempts at rallies to stage breakouts above that level.

The unfortunate part - for the bulls - was that the many failtures to breach that overhead resistance were not for want of encouraging news and positive develoments.

The latest March -10 combined export estimates from Societe Generale de Surveillance and Intertek Agri Services averaged 450,000 tonnes, up 59,000 tonnes or 15.61 per cent compared to that for the corresponding period in February.

And the Malaysian Palm Oil Board put end-February 2010 stocks at 1,785,333 tonnes, which not only was lower by some 218,000 tonnes or 10.90 per cent from that at the end of January 2010 but also the lowest stocks have been since September 2009, when stocks were figured at 1,579,252 tonnes.

Conclusion: This market will, in all probability, fall in early trade this week to test the RM2,630 immediate support level.

A decisive breakdown below that support level will mark not only the end to the February through early March RM2,400-RM2,720 short-term bull run, it also will signal the start to a new short-term bear phase.


Sunday, March 14, 2010

Bursa Malaysia, Dalian China Hail Palm Oil Futures Competition From Jakarta

Bursa Malaysia Derivatives Sdn Bhd and its Chinese counterpart, Dalian Commodities Exchange, said they see Jakarta’s impending launch of the rupiah-based crude palm oil (CPO) futures contract next month as healthy competition.

“We welcome more competition. The profile of palm oil is raised internationally with more exchanges introducing palm oil futures.

It also jives with our tie-up with CME Group to launch the new US dollar-denominated palm oil futures contract (known as CUPO),” Bursa Malaysia Bhd chief executive Datuk Yusli Mohamed Yusoff told a news conference at the Palm Oil Outlook Conference 2010 in Kuala Lumpur Tuesday.

Indonesia has been planning for a local benchmark, which it feels will provide a better reflection of local supply and demand and will eliminate currency risk factors.

PT Bursa Komoditi & Derivatif Indonesia, Indonesia’s new commodities and derivatives exchange (ICDX), has reportedly said it hopes to succeed rival Jakarta Futures Exchange, which struggles to attract planters to trade CPO on its exchange.

On the launch of CUPO in Chicago on May 23, Yusli said it will boost palm oil’s popularity as a reliable and flexible hedging tool.

Malaysia is the world’s biggest palm oil exporter and has the biggest futures market for the commodity.

Malaysia has two palm oil futures products, namely the ringgit-based FCPO contract and the US dollar-denominated FUPO contract.

“Despite the prospects of a more competitive environment, we’re confident that the FCPO will remain the global benchmark reference, considering we’ve had an established transparent trading record of 30 years,” Yusli said.

Dalian Commodity Exchange senior manager Wang Yun Tao told Business Times that he sees ICDX’s move as a logical and positive development.

“We have heard about ICDX’s plans and we understand this development is based on market needs.

We view this as healthy competition as there is unlikely to be much negative impact in the short term,” Wang added.


Neste Oil’s growing palm oil use for biofuels

Neste Oil could buy 2.4 million to 2.5 million tonnes of vegetable oils for four biofuel plants, putting the Finnish refiner on par with consumer goods giant Unilever as a top vegetable oil buyer.

The bulk of Neste Oil’s vegetable oil purchases will come from palm oil, currently the cheapest in the world.

Here are some facts about Neste Oil and its growing palm oil use.

  • Neste Oil has developed biofuel technology that allows flexible use of any vegetable oil or animal fat for producing its NExBTL fuel. The fuel does not need to be blended with fossil diesel and can be used as it is for the transport sector.
  • Palm oil will make up the bulk of the refiner’s feedstock. Analysts say this may narrow palm oil’s discount to soyoil below $100 a tonne.
  • In Finland, Neste Oil has two plants producing NExBTL, which has been marketed as the world’s cleanest fuel. The combined capacity of the factories stand at 350,000 tonnes.
  • Neste Oil has invested a combined 1.22 billion euros to build one biofuel plant in Singapore and another in Rotterdam that each have a capacity of 800,000 tonnes. The Singapore plant will be completed in 2010 and the Rotterdam factory in 2011.
  • The firm is part of the Roundtable on Sustainable Palm Oil (RSPO) — a grouping of planters and consumers who have developed a certification system that includes commitments to preserve wildlife and forests when expanding estates.
  • Neste Oil, which has committed to use only certified palm oil by end-2015, will still make its own greenhouse gas assessments on crude palm oil sourced through the RSPO.
  • The Finnish refiner now applies the segregation method to its supply chain system that allows for the mixing of certified green palm oil with those produced by non-RSPO plantations.
  • It may go over to mass-balancing its supply chain, which means Neste Oil will administer the mixing of these two type of palm oil available so that they know the conditions and the farming methods of their suppliers.
  • Neste Oil dropped to an underlying operating loss in the fourth quarter due to weak margins and said it expected 2010 to be challenging.

Europe Still Largely Depends On Palm Oil, Says MPOC

Europe still largely depends on palm oil to meet its oil and fats requirements despite European non-governmental organisations (NGOs) continuing to berate Malaysia over allegations that the commodity damages the environment, says Malaysian Palm Oil Council CEO Tan Sri Dr Yusof Basiron.

In recent years, the plantation industry in Malaysia has been forced by the NGOs to participate in the Roundtable on Sustainable Palm Oil (RSPO) as a condition to ensure access into the European Union (EU) market as they have been throwing allegations that palm oil is a threat to the Orang Utan habitat and other animals, he said.

“We are not keen to withdraw from Europe because they need our oil more than we need them. I would say we equally need them as much as they need us because it is not easy to replace six or seven million tonnes of palm oil they are importing from us,” he told a roundtable discussion on palm oil hosted by BERNAMA.

It was moderated by Bernama Editor-in-chief Datuk Yong Soo Heong, Deputy Editor-in-Chief Puan Salbiah Said in-charge of Bernama Economic Service (BES) and an Assistant Editor in the BES Cik Siti Hawa Othman.

He said Europe would probably need about 15 to 16 million hectares of land in order to replace palm oil and produce six to seven million tonnes of rapeseed oil.

“They don’t have that kind of land anymore.

They are chronic net importers of edible oil and fats. They need us. They cannot do without importing palm oil,” he said.

Dr Yusof said although the NGOs are very strong in lobbying the European governments to put forms of trade barriers, MPOC is well aware that the continent did not have a choice than to import palm oil.

“As a palm oil producer, Malaysia continues to take the position to supply competently as possible to meet the requirements of our customers.

“We don’t discriminate our customers. We promote good relationship, marketing and efforts in order to continue to sustain and develop these markets more and more. So, big or small we value them.

“It is important to engage the NGOs and try to see how their requirements can be met without deviating from our opportunities and interests to promote the palm oil industry.

“And now we have established and successfully adopted the RSPO principles and criteria, its obvious that the NGOs are beginning to see the good results we are able to supply to Europe and even the US with certified sustainable palm oil,” he said.

Dr Yusof said this is an on-going process of improvement and new efforts must be put in to make situations more acceptable to NGOs and consumers.

He also said contrary to allegations that palm oil was destroying the Orang Utans’ habitat, these primates were thriving in oil palm plantations to the extent that these animals were feasting on palm oil fruits.

“Confirmation from experts, the Orang Utan eats the loose fruits on the ground and they do that regularly visiting our plantations. In the end, the human kind is not the one benefiting from our palm oil industry as food.

“Many other animals, monkeys, squirrels you name it are all benefiting from oil palm fruits.

“The abundance of food for these animals at oil palm plantations was helping to increase monkeys’ population. So, the allegations that we are destroying the habitat is baseless when in fact palm oil is procreating the species,” he added.


Bigger crowd, more Americans at palm oil meet

The Palm and Lauric Oils Conference & Exhibition Price Outlook (POC 2010) was a lot more crowded than last year and there were more Americans.

The higher turnout was in anticipation of CME Group announcing the launch of its new US dollar-denominated cash-settled CPO futures contract, called CUPO, on CME Globex electronic trading platform.

Traders in Chicago get to trade CUPO from May 23 this year but those in Kuala Lumpur will get access to it on May 24 due to the 12-hour difference.

CME Group vice-chairman Tim Andriesen said the opportunity to work with partner Bursa Malaysia enables it to offer a contract that meets the growing demand for trading palm oil, one of the world’s most widely used commodities, on CME Globex, the same electronic trading platform as CME Group’s existing suite of agricultural products.

“Food processers, commercial firms and other multinational companies that use crude palm oil and trade in US currency now have an alternative for hedging that risk,” he told an audience of 1,800 traders and oil palm planters from some 50 countries who flew in to Kuala Lumpur this week.

Andriesen also said that the creation of its US dollar futures contract for palm oil would create opportunities for cross-trading with soyabean oil, based on the historically strong correlation between these products.

Together, palm oil and soyabean oil account for about 61 per cent of all edible oils in the world.

True to the theme “Global Connectivity – Raise the Game”, it was a historic moment as Bursa Malaysia Derivatives moved closer to integrate its trading platform with CME Group, the world’s largest derivatives exchange for grains, livestock, oilseeds, dairy and timber.

At the gala dinner, Kenanga Deutsche Futures Sdn Bhd, a subsidiary of K&N Kenanga Holdings Bhd, emerged the best overall performer for the seventh consecutive year in attracting the biggest trades into Bursa Malaysia Derivatives Exchange.

“We strive to challenge ourselves to maintain our position as the leading futures brokerage in Malaysia,” Ng Chin Leng, executive director of Kenanga Deutsche Futures Sdn Bhd, said at the award ceremony.

All in, brokers and traders agreed that that the latest POC series was more vibrant and well-received.