950828

Asian palmoil prices

seen consolidating

KUALA LUMPUR, Aug 28 (Reuter) - Southeast Asian palm and laurics will consolidate this week, with Malaysian palmoil prices drifting narrowly in a market affected by underlying weak local fundamentals, regional traders said on Monday.

Indonesian palms are expected to trend steady to lower due to lack of support. Philippines coconut oil prices slipped on weak palmoil last week and may stay in a narrow range this week due to an absence of market-moving news, they said.

"Production is seen picking up as the peak season is approaching soon," a Malaysian trader said.

Palmoil production usually peaks in the September/November period.

Official figures showed July's output was 677,936 tonnes. Traders said the output is expected to hit 730,000 tonnes in August, 810,000 in September and 830,000 tonnes in October.

"Output is rising and demand has slowed down a lot recently, which may result in a build-up of stocks in the coming months," a trader in a Malaysian commission house said.

"We are in the high-stock months," he said.

Malaysian crop forecaster Ivan Wong recently estimated end-August palmoil stocks at 685,000 tonnes.

Wong said palmoil stocks are projected to trend upwards to reach 955,000 tonnes at end-October and 950,000 tonnes at end-December 1995.

India was in the market last week, tendering for October RBD palm olein but Kuala Lumpur traders said the quantity bought was too small to boost the market.

India's State Trading Corporation bought 6,000 tonnes of RBD palm olein for first-half October shipment.

Third month, November futures closed on Friday at 1,318 ringgit a tonne. Traders expect the contract to trade in the 1,300 to 1,340 ringgit range this week.

Palm prices in Indonesia also look soft.

"I think prices will remain at last week's level or ease slightly," an Indonesian trader from the north Sumatran city of Medan, a key growing region, said. "Demand is also likely to be poor."

"Palm oil prices have come off sharply after a steady slide in palm olein," another trader said. "The lack of support both locally and overseas seems to be driving prices down."

Traders said palmoil was traded at 1,215-1,220 rupiah/kg last week in Medan, down from 1,240-1,250 rupiah previously.

Philippines traders said coconut oil prices will stay in a narrow range in the absence of market-moving news.

"It will be range-trade for now, although there may be a technical rebound. The lack of support from palm oil pulled prices down," a Filipino trader in a major company said.

Prices for nearby months were quoted at $660-$670 a tonne CIF Europe. Traders said coconut oil would fluctuate in a band of $10-$15 in the coming days.

"It's going to stay in a tight range unless something shakes it loose and there's nothing on the horizon that would make that happen," another Filipino dealer said.-Reuter