JAKARTA: Malaysian palm oil futures dropped 2.9 per cent yesterday as investors pocketed gains after a recent rally, but talk of strong exports limited the fall, traders said.
Palm still gained 4.3 per cent recent this week despite yesterday’s fall, due to strong run early in the week on hopes for a demand rise ahead of Asian festivals, which coupled with lower output could put further pressure on Malaysian palm oil stocks this month after they hit a 3-month low in July.
“It was a choppy day. Prices managed to bounce back to above RM2,500 at some point as people talked about good exports for the first 15 days but it looks like the selling pressures were quite strong,” said a trader at a Kuala Lumpur-based brokerage.
He said there was speculation that Malaysian palm oil exports during the August 1-15 period, due out next week, reached 665,000 tonnes, an increase of 1 per cent, which is a strong improvement compared to a drop of 12 per cent in the first ten days.
The benchmark October contract on Bursa Malaysia’s Derivatives Exchange dropped RM74
to RM2,441 a tonne. The contract traded in a range of RM2,424 to RM2,510 in the day. Overall volume was 22,927 lots of 25 tonnes each.
“I believe that India and China are buying so it looks like that shipments will reach 1.4 million tonnes this month,” the Kuala Lumpur-based brokerage trader said.
On the Malaysian physical market, palm oil for August delivery was traded at RM2,480-RM2,520
in the southern region and at RM2,470-RM2,500 in the central region. Source : Business Times