SINGAPORE, May 15: Malaysian palm oil futures eased on Wednesday, declining for a third straight session, as weak exports and a firm ringgit raised 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 on Wednesday.
A firmer ringgit also dampened buying interest as it made the ringgit-priced crude palm oil more expensive for overseas buyers and reduced refiners’ margins. The currency rose above the 3-ringgit mark against the dollar after the country’s general elections on May 5.
‘We continue to see a downtrend in terms of exports, which is bearish on the market. 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,’ said a trader with a foreign commodities brokerage in Kuala Lumpur.
Shipments fell 16.7 percent in the first 10 days of May from a month ago, according to ITS.
By the midday break, the benchmark July contract on the Bursa Malaysia Derivatives Exchange had lost 0.7 percent to 2,286 ringgit ($763) per tonne, after trading between 2,277 and 2,294 ringgit.
Total traded volumes stood at 16,773 lots of 25 tonnes each, higher than the usual 12,500 lots.
Malaysia, the world’s No.2 palm oil producer, will set its crude palm oil export tax for June at 4.5 percent, unchanged from May, a government circular showed on Wednesday.
Official data showed the country’s palm oil stocks fell to 1.93 million tonnes in end-April, crossing below the psychological two-million-tonne mark and sending the market to a one-month high on Monday, although prices eventually came off due to worries over lacklustre export demand.
In vegetable oil markets, US soyoil for July delivery fell 0.53 percent in early Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange lost 1.9 percent.
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