VEGOILS-Palm reverses early gains on estimates of slowing output decline
Recasts with closing prices
By Mei Mei Chu
KUALA LUMPUR, Nov 11 (Reuters) - Malaysian palm oil futures ended lower on Thursday after an industry body indicated a slower pace of production decline, but stronger exports in early November capped losses.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange closed down 36 ringgit, or 0.73%, at 4,884 ringgit ($1,176.44) a tonne.
Palm had opened higher tracking firmer Chinese vegetable oil futures but later declined as the Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated a slower decline in November production, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The SPPOMA forecast output during Nov. 1-10 to decline 3.8% on the month, compared with an 18% decline during Nov. 1-5, Bagani said.
"There are signs of weakness in November production with some planters observing less fruit bunches and higher rainfall," Adrian Kok, an equity analyst at Kenanga Investment Bank, said in a note.
Kenanga expects November production to decline 3.8% to 1.66 million tonnes from the prior month. Inventory is pegged to fall 2.9% to 1.78 million tonnes.
Exports of Malaysian palm oil products for Nov. 1-10 rose 13.4% to 563,093 tonnes from the same period in October, cargo surveyor Societe Generale de Surveillance said. nAPN0BL4DC
"We project prices to remain firm at 4,000 ringgit-5,000 ringgit in November as production is peaking below its potential and labour shortage issues in Malaysia remain unresolved for now," Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.
Dalian's most-active soyoil contract DBYcv1 rose 2.8%, while its palm oil contract DCPcv1 was up 2.9%. Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.1515 ringgit)
(Reporting by Mei Mei Chu; Editing by Subhranshu Sahu & Aditya Soni)
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