Palm oil stays down

May 16, 2013

Palm oil
Palm oil

Malaysian palm oil futures fell for a third straight day on Wednesday, as weak exports and a firm ringgit currency stirred doubts about the strength of demand for the edible oil. Exports of Malaysian palm oil products for the first 15 days of May fell 7.6 percent to 599,300 tonnes from 648,275 tonnes shipped during the same period a month ago, cargo surveyor Intertek Testing Services (ITS) said.

Another cargo surveyor, Societe Generale de Surveillance, reported a smaller decline of 3 percent for the same period. “We continue to see a downtrend in terms of exports, which is bearish for the market,” said a trader with a foreign commodities brokerage in Kuala Lumpur. But on the bright side, the decline is slightly less than the first 10 days and we will have to see if exports will recover in the second half of the month.” Shipments fell 16.7 percent in the first 10 days of May from a month ago, according to ITS.

At market close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,296 ringgit ($763) per tonne, after trading between 2,277 and 2,299 ringgit. Total traded volumes stood at 42,201 lots of 25 tonnes each, higher than the average 35,000 lots.

Malaysia, the world’s No 2 palm oil producer, will set its crude palm oil export tax for June at 4.5 percent, flat with May, a government circular showed. Official data showed the country’s palm oil stocks fell to 1.93 million tonnes at the end of April, below the psychological two-million-tonne mark and sending the market to a one-month high on Monday, although prices came off on worries over lacklustre export demand. In vegetable oil markets, US soyaoil for July delivery fell 0.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange lost 2.5 percent. Reuters

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