KUALA LUMPUR, DEC 14: South-east Asian palm oil traders are waiting for this week's fresh official news on market fundamentals to give them direction.But trading volume is likely to be limited again by a lack of liquidity and weak demand.
Malaysia's Palm Oil Registration and Licensing Authority (Porla) is scheduled to release key November crop data at 0430 GMT Tuesday.
"We are keen to see how are the Porla figures going to be, particularly the stock number which (influential crop forecaster) Ivan (Wong) has put it higher in his latest forecast," said a trader in Malaysia.
"We expect some selling before the Porla data on Tuesday. Porla can come out with surprises, and people preferred to liquidate their positions in view of slow demand last month."
Wong, who is also scheduled to release his final data for November crop on Monday, last week forecast end-November stocks at 755,000 tonnes, up from end-October's 657,998 tonnes.
Wong estimated production in November at 729,000 tonnes against 793,546 inOctober, and exports at 520,000 tonnes in November against 767,982 a month earlier.
Regional traders said the market was still uncertain of the Malaysian fundamentals outlook.
"When there are no fundamental changes, the market can go either way. But since there is no volume, the chance of prices going south is big," said one chartist in Singapore.
"There is simply no demand," said another Singaporean trader.
Traders said the futures market on the Commodity and Monetary Exchange (Comex) continued to lack strong participation from either local or foreign players.
Singaporean traders said thin volume in the palm oil market indicates that prices are likely fall this week.
On Friday, Malaysia's benchmark, third month February futures contact ended 16 ringgit lower at 2,238 ringgit a tonne. Traders said the contract support level is pegged at 2,200 ringgit with resistance at 2,285.
The market is also keen to know the outcome of the December 1-15 export estimate, which is set to be announced by cargosurveyor SGS (M) Sdn on Tuesday.
"Exports in November were poor. So we are keen to find how is the first half December demand going to be," said a Kuala Lumpur trader. "I don't think it is going to be good because there was a slow down in buying from India and Pakistan owing to its domestic crop harvests period now," he said.
But some private parties were seen in the market last week, buying small quantities of RBD palm olein as prices were relatively reasonable, Malaysian traders said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.