KUALA LUMPUR: Malaysian palm oil futures were down over 1 percent at midday on Tuesday as high end-stocks and sluggish demand dented sentiment while weakness in related edible oils compounded the decline.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 1.3 percent at 2,496 ringgit ($612.97) at the midday break, in line for a second straight day of losses.
Palm had been on a downward trend on weak demand and high stockpiles before jumping nearly 3 percent to reach its highest levels in a week last Friday.
Trading volumes stood at 19,491 lots of 25 tonnes each at noon on Tuesday.
“Storage tanks are full and there is no demand,” said a Kuala Lumpur-based trader.
Inventory levels in Malaysia, the world’s second largest palm oil producer after Indonesia, climbed to their highest in nearly two years at end-November.
Stockpiles rose 16 percent to 2.56 million tonnes, official government data showed last week, while demand fell nearly 12 percent to 1.35 million tonnes in November.
Cargo surveyor data for Malaysian palm oil shipments for the Dec. 1-20 period is scheduled for release on Wednesday after 0300 GMT.
Another futures trader added that overnight weakness in soyoil on the Chicago Board of Trade and current losses in palm olein on China’s Dalian Commodity Exchange could hamper any attempt at recovery in Malaysian palm oil.
Palm oil prices are impacted by the movements of other edible oils, as they compete for a share in the global vegetable oils market.
The January soybean oil contract on the Chicago Board of Trade saw a 0.4 percent decline in its previous trading session, but was last up 0.2 percent on Tuesday.
The May soybean oil contract on the Dalian Commodity Exchange fell 1 percent, while the Dalian January palm olein contract declined 0.7 percent.
Source: Brecorder.com
