High port stocks damp Chinese demand for palm oil

29 Oct 09

China, the world’s second largest vegetable oil buyer, has slowed palm oil purchases by 20 to 25 percent this month amid swelling stocks at its ports, which may weaken exports and put pressure on prices.

Traders say China’s palm oil stocks are up 25 percent to half a million tonnes, a marked contrast to its port soybean stocks, which have fallen by as much as half in the past three months to 2-3 million tonnes.

Soy imports are expected to surge as China’s food processors try to keep up with soyoil demand but on the palm oil front, China just bought 340,000 tonnes of mostly refined palm olein from Malaysia compared to the monthly 400,000-450,000 tonnes.

“Chinese buyers are not even price sensitive about palm oil these days,” said a Singapore-based trader who deals regularly with the China market. “They usually run away when refined palm oil prices are $650 a tonne but now that equation does not work. They are just buying hand-to-mouth, very small cargoes, as stocks are large.”

Refined palm olein prices now stand at $670 a tonne and traders expect the cash market to weaken on the lack of strong demand. Malaysia’s exports, which had a strong performance in the first half of October, have started to soften.

INDIA BUYS

India has been buying more. Cargo surveyor data for Malaysia’s Oct. 1-25 showed that the world’s top buyer of vegetable oils snapped up 38 percent more palm oil at 86,010 tonnes compared to the same period a month ago.

This week, India bought 20,000 tonnes of crude palm oil from Malaysia and Indonesia at $650 and $680 a tonne based on cost, insurance and freight (CIF), traders said. There may be new orders if crude palm oil prices fall to $625-$630 a tonne.

Cargoes would be smaller though, due to the incoming soybean harvest in India, traders say. Prices of the oilseed have fallen to 21,500 rupees ($452) a ton this week compared to 22,500 rupees a week ago as more soybeans entered the market.

“The new crushing season started this month and soybean arrivals have been gaining pace. Soyoil imports from the U.S. are non-existent for now,” said a leading trader from the Indian port city of Mumbai.

But India is on the lookout for soyoil cargoes for Dec. and Jan. delivery once the soybean crop gets processed, other dealers say.

They say orders will be directed mostly at Brazil and Argentina, which are expected to produce a bumper soybean crop after suffering from drought this year.
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Auto Sales ~ Sep 09 : 46,069

Motor Vehicle Sales Down 5 Per Cent In September 2009

KUALA LUMPUR, Oct 15 (Bernama) -- Motor vehicle sales volume in September 2009 was 2,469 units or five per cent lower than the previous month, the Malaysian Automotive Association (MAA) said Thursday.

The lower sales was attributed by the association to the short working month due to the Hari Raya festive holidays."Sales volume for October 2009 is expected to be maintained," MAA said in a statement Thursday.

Motor vehicle sales for September 2009 decreased by nine per cent to 46,069 units from 50,729 units in the same period last year, the association said.

Year-to-date September 2009 motor vehicle sales declined by seven per cent to 397,619 units from 429,913 units previously.
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26 Oct 09 BNM ~ OPR unchanged at 2.00%

Monetary Policy StatementAt the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to leave the Overnight Policy Rate (OPR) unchanged at 2.00 percent.

Since the MPC in August, the international economic and financial conditions have improved further. Economic activity in the advanced economies has shown broader signs of stabilisation, supported by the impact of policy measures implemented and an improvement in consumer sentiment and business confidence.

Several regional economies have reported positive growth in the third quarter, indicating that recovery in the region is ongoing. Notwithstanding these improvements, the outlook for the global economy continues to be uncertain, with recovery likely to be slow and uneven in view of the ongoing adjustments.

In the domestic economy, stronger evidence has emerged to suggest that conditions are improving and a recovery in economic activity is gaining some strength. These improvements are more broad-based and are reflected in stronger labour market conditions, consumer and business sentiments, industrial production, financing activity and external trade. These positive developments are expected to continue into 2010, with growth in the domestic economy expected to continue to be supported by existing policy measures and the growing confidence in the private sector.

Consumer prices declined at a slower rate in September. The decline in prices largely reflects the cumulative fall in fuel prices since June 2008 and the easing pressure on food prices. The decline in consumer prices, however, is expected to be temporary.

Excluding further unanticipated price adjustments and external influences, inflation in 2010 is projected to be positive but remain subdued.With improving domestic economic conditions, and as price pressures and inflationary expectations are expected to remain contained going forward, the assessment is that the current monetary policy stance is appropriate and will continue to provide support to economic activity.

Bank Negara Malaysia28 October 2009

BNM Reserves ~ 15 Oct 09 : RM 334.2 b

The international reserves of Bank Negara Malaysia amounted to RM334.2 billion
(equivalent to USD95.9 billion) as at 15 October 2009.

The reserves position is sufficient to finance 9.5 months of retained imports
and is 3.9 times the short-term external debt.
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New Portfolio ~ 2009 Oct ...

Aaaaa ..... good time to start a new portfolio.

22 Oct 2009
Injected new Capital of RM 34,5oo into new portfolio
I buy 6,000 Analabs at RM 1.14

23 Oct 2009
I buy 4,300 Analabs at average price of RM 1.1414

26 Oct 2009
I buy 9,100 Analabs at RM 1.13

29 Oct 2009
I buy 15,000 Leader at RM 0.78
I injected another RM 5,000 capital