Malaysia Sept palm oil exports to fall amid defaults
11 Sep 2008 3:45 pm
Kuala Lumpur - Lower export taxes in Indonesia, ample stocks with buyers such as China and recent defaults by several importers in Asia may slow down Malaysia's palm oil exports in September after two successive months of significant rise.
Exports may fall to anywhere between 1.2 million and 1.3 million metric tons this month after reaching record levels of close to 1.5 million tons in August, traders said Thursday.
"Exports were sharply higher both in July and August. Such gains are unlikely to be sustained this month," said a Singapore-based broker.
He said in previous months Malaysia benefited from the high export taxes for palm oil in Indonesia, which may not be the case in September.
Global trading companies were sourcing large volumes of palm oil from Malaysia for supplying to importers.
Indonesia has now scaled down the taxes in line with the slump in global prices.
"China made heavy purchases in the run-up to the Olympics and seems to be well-stocked with vegetable oils," said a Kuala Lumpur-based executive at a global trading company.
Even last month, when Malaysia's overall palm oil exports were higher, China's purchases began to slow down.
Exports grew 4.6% on month but this increase was not due to China, said Alvin Tai, an analyst with OSK Research.
According to Malaysian Palm Oil Board data, Malaysia's palm oil exports to China in August fell 11.7% on month to 369,019 tons. China is Malaysia's largest palm oil buyer by volume.
Importers also generally tend to buy more volumes in the run-up to the Muslim holy month of Ramadan, which is usually followed by a slowdown in purchases.
Cargo surveyor Intertek Agri Services estimated a 1.7% fall on month in Malaysia's palm oil exports during the September 1-10 period. Another surveyor, SGS, estimated exports in the same period at 2.3% lower on month.
Shipments were lower to all major destinations, except India.
"Currently, the shipping lineup doesn't seem to be very impressive," said a Kuala Lumpur-based trading executive.
He said many buyers in south Asia and China were on the sidelines during the sharp fall in prices last month, adding there were also a renegotiation of prices.
He said this has disturbed the purchase schedule of importers and the usual September shipments may spill over to October.
Traders also caution if the slump in prices continues, it could trigger a fresh round of defaults by buyers.
Palm olein prices have fallen by around $50/ton in just three days. Buyers are reluctant to lock in supplies due to the uncertainty over prices.
"Just when it appeared that prices have bottomed out, they have recorded a sharp fall again," said a vegetable oils importer in Mumbai.
11 Sep 2008 3:45 pm
Kuala Lumpur - Lower export taxes in Indonesia, ample stocks with buyers such as China and recent defaults by several importers in Asia may slow down Malaysia's palm oil exports in September after two successive months of significant rise.
Exports may fall to anywhere between 1.2 million and 1.3 million metric tons this month after reaching record levels of close to 1.5 million tons in August, traders said Thursday.
"Exports were sharply higher both in July and August. Such gains are unlikely to be sustained this month," said a Singapore-based broker.
He said in previous months Malaysia benefited from the high export taxes for palm oil in Indonesia, which may not be the case in September.
Global trading companies were sourcing large volumes of palm oil from Malaysia for supplying to importers.
Indonesia has now scaled down the taxes in line with the slump in global prices.
"China made heavy purchases in the run-up to the Olympics and seems to be well-stocked with vegetable oils," said a Kuala Lumpur-based executive at a global trading company.
Even last month, when Malaysia's overall palm oil exports were higher, China's purchases began to slow down.
Exports grew 4.6% on month but this increase was not due to China, said Alvin Tai, an analyst with OSK Research.
According to Malaysian Palm Oil Board data, Malaysia's palm oil exports to China in August fell 11.7% on month to 369,019 tons. China is Malaysia's largest palm oil buyer by volume.
Importers also generally tend to buy more volumes in the run-up to the Muslim holy month of Ramadan, which is usually followed by a slowdown in purchases.
Cargo surveyor Intertek Agri Services estimated a 1.7% fall on month in Malaysia's palm oil exports during the September 1-10 period. Another surveyor, SGS, estimated exports in the same period at 2.3% lower on month.
Shipments were lower to all major destinations, except India.
"Currently, the shipping lineup doesn't seem to be very impressive," said a Kuala Lumpur-based trading executive.
He said many buyers in south Asia and China were on the sidelines during the sharp fall in prices last month, adding there were also a renegotiation of prices.
He said this has disturbed the purchase schedule of importers and the usual September shipments may spill over to October.
Traders also caution if the slump in prices continues, it could trigger a fresh round of defaults by buyers.
Palm olein prices have fallen by around $50/ton in just three days. Buyers are reluctant to lock in supplies due to the uncertainty over prices.
"Just when it appeared that prices have bottomed out, they have recorded a sharp fall again," said a vegetable oils importer in Mumbai.