KUALA LUMPUR: Malaysian palm oil futures fell to a near two-month low on Tuesday, as poor demand for palm oil shipments weighed down the market.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 2.1 percent to 2,539 ringgit ($647) per tonne at the close of trade, marking the fourth consecutive session of declines. It hit an intraday low of 2,537 ringgit per tonne, the lowest since March 9.
Traded volumes were 51,744 lots of 25 tonnes each, higher than a 2015 daily average of 44,600.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Tuesday that palm oil shipments for the full month of April declined between 5 percent and 7 percent from March, as exports to major buyers Europe, China and India all fell.
“Exports are still not good, and production is still doing alright, we believe it (April production) is close to double digit growth,” said a palm oil trader based in Kuala Lumpur.
“May exports could be better as (benchmark) prices drop or hover around current levels this month.”
April production in Malaysia, the world’s second-largest palm grower, is seen rising in line with the seasonal trend from the 1.2 million tonnes produced in March. <MYPOMP-CPOTT> This would contribute to higher inventory levels, likely pushing down benchmark prices of the tropical oil. <MYPOMS-TPO>
Palm oil may break a support at 2,546 ringgit per tonne and fall more into a range of 2,505-2,530 ringgit, according to technical analysis by Wang Tao, a Reuters market analyst for commodities and energy technicals.
In competing oils, the September soybean oil contract on the Dalian Commodity Exchange fell 0.2 percent, while the May Chicago Board of Trade soyoil contract gained 0.9 percent.
The offer price for crude palm kernel oil stood at 4745.43 ringgit per tonne <PKO-MYSTH-M1> in the evening, according to price assessments by Thomson Reuters.
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.9270 ringgit)
($1 = 66.4500 Indian rupees)
($1 = 6.4775 Chinese yuan renminbi)
Source : The Star]]>