Futures Palm Oil Eased in Malaysia, Demand slowdown

Palm oil futures eased inching down for a second straight session as lacklustre export data fuelled traders' concerns over a slowdown in demand in Malaysia.

Palm exports for Nov. 1-20 fell 3.3 percent to 1.02 million tonnes from a month ago, cargo surveyor Intertek Testing Services said on Tuesday. Another surveyor, Societe Generale de Surveillance, reported a similar drop of 3.8 percent in shipments for the same period.

Although Chinese demand continued to grow on festival buying for Lunar New Year and stocking up ahead of stricter regulation in 2013, the gain was offset by much weaker shipments to Europe and India.

"The market is fundamentally bearish and prices will further
correct before positive sentiment enters the market," said a
trader with a Malaysian commodities brokerage.

"A correction towards 2,350 to 2,400 ringgit per tonne should be healthy for both consumers and packers." By the midday break, the benchmark February contract on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,430 ringgit ($792) per tonne. Prices on Tuesday had risen to 2,485 ringgit, the highest since Nov. 2.

Total traded volumes were thin, at 10,414 lots of 25 tonnes each, compared to the usual 12,500 lots.

Shares of Olam International Limited rebounded on Wednesday, in a sign that investors were relieved that research firm Muddy Waters had yet to publish a long, detailed report on the company as it has with other targets.

The short-seller published its first official material on the company on Wednesday, taking closer aim at the Singapore commodities trader's debt load and its cash burn rate.

European demand for palm oil could take a further hit after international lenders failed for a second week running to agree
on how to get Greece's debt down to a sustainable level, suggesting the debt crisis could still drag on.

In a bullish sign for palm oil, Brent crude rose above $110 per barrel on Wednesday, boosted by fears of supply disruption from the Middle East as clashes raged between Palestinians and Israelis, despite overnight truce talks.

In other vegetable oil markets, U.S. soyoil for December elivery fell 0.8 percent in early Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange edged up 0.6 percent by the midday break. Palm, soy and crude oil prices at 0439 GMTnsumer goods.