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VEGOILS-Palm oil up on better exports, logs first annual gain in 3 years
December 31, 2013 / 6:12 AM / 4 years ago

VEGOILS-Palm oil up on better exports, logs first annual gain in 3 years

(Updates prices)
    * Prices up 9 pct this year
    * Malaysia's December palm oil exports down 1.1 pct - ITS
    * Better-than-expected exports trigger speculative buying -
trader

    By Anuradha Raghu
    KUALA LUMPUR, Dec 31 (Reuters) - Malaysian palm oil futures
ended higher on Tuesday after a slight recovery in exports
signalled rising food and fuel demand for the edible oil,
triggering speculative buying that lifted prices to their first
annual gain in three years.
    Cargo surveyor Intertek Testing Services reported that
Malaysian palm oil exports in December slipped 1.1 percent from
November, improving from steeper declines earlier in the month,
partly due to bigger imports from China. 
    "Exports were certainly better than expected and this
encouraged a lot of speculative buying," said a trader with a
local commodities brokerage. 
    "This could be the factor keeping prices above the 2,600
ringgit level," the Malaysia-based trader added.            
    The benchmark March contract on the Bursa Malaysia
Derivatives Exchange inched up 1.1 percent to 2,660 ringgit
($811) per tonne by Tuesday's close. Prices traded in a range
between 2,614 and 2,661 ringgit.
    Traded volume stood at 17,336 lots of 25 tonnes, less than
half the average 35,000 lots as the year-end holiday slowed
trading momentum.  
    The Malaysian palm market, which sets the tone for global
prices, has climbed 9.1 percent this year - its first annual
gain since 2010. Average prices in 2012 had plunged 23 percent. 
    A Reuters poll of 25 analysts in June had predicted average
prices in 2013 to drop 15 percent from a year earlier to 2,500
ringgit as the oilseed faces slowing demand in key markets and
increased competition from rival soyoil. 
    But after hitting a four-year low of 2,137 ringgit at
end-July, prices slowly recovered losses after top palm producer
Indonesia said it would raise its minimum bio content in diesel
to 10 percent from 2014 onwards. 
    Malaysia said it was working to hike its own requirements in
an effort to whittle down stockpiles and cushion prices.
    Crude palm oil is being increasingly used as an additive to
fossil fuels as it can cut costs and reduce environmentally
damaging emissions.
    Analysts say palm oil prices could strengthen in the first
quarter of 2014 due to rising demand from the biofuel industry
and a recovery in the global economy, although bumper crops of
competing vegetable oils could curb gains.
    Another cargo surveyor, Societe Generale de Surveillance,
will release export data for December later on Tuesday.
 
    In other markets, Brent futures held above $111 a barrel on
Tuesday on worries about a prolonged outage from OPEC member
Libya, positioning the benchmark to end 2013 virtually
unchanged.    
    In other competing vegetable oil markets, the U.S. soyoil
contract for March rose 0.6 percent in late Asian trade.
The most-active May soybean oil contract on the Dalian
Commodities Exchange fell 1.2 percent.
 
  Palm, soy and crude oil prices at 1012 GMT
                                                                                                   
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JAN4    2629   +26.00    2592    2629      99
  MY PALM OIL      FEB4    2650   +26.00    2606    2650    1276
  MY PALM OIL      MAR4    2660   +29.00    2614    2661   10592
  CHINA PALM OLEIN MAY4    6038   -42.00    6016    6072  523028
  CHINA SOYOIL     MAY4    6850   -80.00    6842    6894  430684
  CBOT SOY OIL     MAR4   39.20    +0.24   38.88   39.23    5205
  NYMEX CRUDE      FEB4   99.02    -0.27   98.90   99.39    6268
                                                                                                   
  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
  Crude in U.S. dollars per barrel
 ($1=3.28 Malaysian ringgit)

 (Editing by Anand Basu and Dale Hudson)

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