VEGOILS-Palm oil rises as Indonesia keeps exports flexible

Credit: REUTERS/Willy Kurniawan

By Rajendra Jadhav

MUMBAI, Oct 12 (Reuters) - Malaysian palm oil futures rose in early trade on Thursday after top producer Indonesia clarified that it will not make exports mandatory via a new exchange.

* The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange rose 35 ringgit, or 0.99%, to 3,586 ringgit ($759.42) per metric ton in early trade.

* Indonesia will launch its crude palm oil (CPO) futures exchange on Friday, but it will not make trading via the exchange mandatory, its chief regulator told Reuters on Wednesday.

* Authorities in the Southeast Asian country had previously planned to make it mandatory for all CPO exports to go through the exchange, in order to drive global palm oil prices and create benchmarks similar to those in Kuala Lumpur and Rotterdam.

* "Anticipating that Jakarta would make exports mandatory, Indonesian sellers were in a hurry to clear inventories. However, now, sales are unlikely to be aggressive, which would lend support to prices," said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.

FUNDAMENTALS

* A flood of cheap sunflower oil from Russia and Ukraine is putting downward pressure on palm oil prices as the two top producers take advantage of currency depreciation to grab a larger share of the edible oils market.

* Exports of Malaysian palm oil products for Oct. 1-Oct. 10 rose 12.5% to 29.6% from a month earlier, data from cargo surveyors showed.

* Malaysia's palm oil stocks at the end of September rose 9.6% to 2.31 million tons, the highest level in 11 months, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday.

* Soyoil futures on the Chicago Board of Trade BOc2 were down 0.74%, as of 0306 GMT.

* The U.S. Department of Agriculture rated 51% of the soybean crop in good-to-excellent condition, down from 52% a week ago and the lowest for this time of year since 2012.

MARKET NEWS

* Asian shares rose on Thursday as markets wagered that U.S. rates have peaked after more dovish remarks from Federal Reserve officials, while traders awaited the U.S. consumer inflation report later in the day for further monetary policy clues.

* Oil prices extended losses for a third session, dragged down by a larger-than-expected crude and gasoline stockbuild in the U.S. and easing supply concerns.

($1 = 4.7220 ringgit)

(Reporting by Rajendra Jadhav; Editing by Mrigank Dhaniwala)

((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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