NEW DELHI: Malaysian palm oil futures extended losses on Wednesday, hitting their lowest in nearly a month, as weak exports and waning demand during the otherwise high-consumption period of Ramadan.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.37 percent at 2,393 ringgit ($602.47) a tonne by the close.
The benchmark contract edged slightly higher during the midday break, largely because of higher soybean prices in Chicago and India’s plans to raise the import tax on soft oils.
Trading volume stood at 26,101 lots of 25 tonnes each.
“Exports continue to be weak and demand for the Ramadan festival has become slack now,” said a Kuala Lumpur-based palm trader.
Buyers typically stock up on palm oil a month before Ramadan, which began in mid-May this year.
Malaysia’s palm oil exports in May dropped 8.8 percent from April to around 1.2 million tonnes, independent inspection company AmSpec Agri Malaysia said last week.
Cargo surveyor Societe Generale de Surveillance (SGS) said the country’s May palm oil exports fell 9.9 percent from a month ago.
In Indonesia, the world’s top palm oil exporter, shipments of palm and palm kernel oils plunged 13.6 percent in April, data from the Indonesia Palm Oil Association showed.
Palm oil inventories in Malaysia, the world’s second-largest producer, are expected to slip to an eight-month low in May, weighed down by a decline in production, according to a Reuters poll.
Palm oil may fall to 2,364 ringgit, as it has broken a support at 2,408 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, the Chicago July soybean oil contract was up 0.06 percent, while September soybean oil on China’s Dalian Commodity Exchange dropped by up to 0.27 percent.
Palm oil is affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Source: Brecorder
