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Morning markets: Chinese import surge lifts palm oil prices. Stocks slump boosts rubber

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Palm oil futures maintained their knack for volatility, without the influence of US markets, which remained closed for the Thanksgiving holiday.

(They will reopen later for a shortened day.)

 

The vegetable oil, having in the last session closed at its lowest at three months on a benchmark contract basis, in this one rebounded 0.9% to stand at 2,632 ringgit a tonne as of 09:20 UK time (03:20 Chicago time).

 

Dollar eases

 

The reversal reflected in part movement in the ringgit, which retreated 0.2% against the dollar, against which it set a one-year high in the last session.

 

A weaker ringgit improves the competitiveness of Malaysian exports, such as palm oil.

 

(The dollar in fact eased 0.1% against a basket of currencies and near its lowest levels in a month but, as in the last session, appears reluctant to fall below a level of 0.93.)

 

Chinese imports rise

 

However, also of help were Chinese import data showing that the country bought in 480,114 tonnes of the vegetable oil last month – a surge of 78% year on year.

 

Indeed, that was well ahead of the average pace of volume gains for 2017, which now stands at 18.3% for the first 10 months.

 

In fact, most of the volumes came from Indonesia, the top palm exporting country, which achieved 112% growth to 258,430 tonnes.

 

Still, growth of 50%, to 221,551 ringgit a tonne in purchases from Malaysia was nothing to be sniffed at.

 

Contrasting reactions

 

Among other edible oils, Chinese imports of soyoil last month came in at 59,397 tonnes, up by 19.4% year on year, but below the average pace of growth for 2017 at 36% (including the October figure).

 

Rapeseed oil imports dropped 22% to 42,072 tonnes, contrasting with average growth of 16.1% over the January-to-October period.

 

Reaction to the data on China’s Dalian exchange was more mixed at growth imports, with soyoil futures for January adding 0.2% to 5,930 yuan a tonne, while January palm oil futures eased by 0.2% to 5,398 yuan a tonne – the contract’s weakest close in three months.

 

By contrast in Canada, canola, an oil-heavy oilseed of which the country is a large exporter, rose by 0.6% to Can$515.90 a tonne for January delivery, boding well for strength in Paris rapeseed later too.

 

Indeed, Chinese imports of canola/rapeseed itself soared 399% year on year last month, to 306,167 tonnes (of which 282,824 tonnes were from Canada).

 

Rapeseed imports for the first 10 months of the year reached 3.96m tonnes, growth of 31%.

 

Rubber stocks slump

 

Chinese imports of rubber, meanwhile, gained 32% to 348,381 tonnes, a little ahead of the average pace for 2017, now standing at 30%, taking total purchases for the January-to-October period to 3.44m tonnes.

 

But what may have been a bigger boost to futures prices, which rose 0.5% to 13,800 yuan a tonne in Shanghai for January delivery, was a separate briefing, showing stocks at inventories monitored by the exchange down a whopping 37% week on week to 322,408 tonnes.

 

That was the first decline of any note since June 2 (when a 0.1% drop to 340,530 tonnes was reported), and the biggest decline on data going back a decade.

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