Malaysian palm oil
futures fell on Thursday evening, charting a fifth session of losses
in six and hitting their lowest in nearly four months as
concerns persisted over rising production and weak exports.Benchmark
palm oil futures for May on the Bursa Malaysia Derivatives Exchange
declined 1 percent to 2,782 ringgit ($625.59) a tonne at the close of
trade. The contract dropped to as low as 2,743 ringgit in the second half
of trading, its weakest since Nov. 4.
Palm had gained about 1
percent on Wednesday, snapping four previous sessions of losses,
but lost nearly 9 percent since the start of last week.
Traded volumes stood at
95,844 lots of 25 tonnes each on Thursday evening.
"After four days of
drop the market pulled back, but now it is coming down again. People
feel that there is more production coming, and demand is slowing
down," said a trader from Kuala Lumpur.
"There
is also too much pressure from soyoil," he said.Lower prices of soyoil
make it more attractive as the preferred edible oil in top consumers such
as China and India.
Palm oil demand for the
full month of February is expected to fall after shipments rose in January
over the Chinese Lunar New Year celebrations. Exports declined 0.8
percent in the Feb. 1-20 time period from the same period last month,
according to data from cargo surveyor Intertek Testing Services. However,
data from another cargo surveyor, Societe Generale de Surveillance, showed
that demand rose 1.7 percent.
Output is forecast to
rise in February as palm's fresh fruit yields are seen recovering from the
El Nino's crop damaging effects.
Government data showed it
had declined 13.4 percent in January, its sharpest drop in a year and its
lowest level since March. Palm oil may test a support at 2,750 ringgit per
tonne, a break below which could cause a loss to the next support
at 2,703 ringgit, said Wang Tao, a Reuters market analyst
for commodities and energy technicals. In related vegetable
oils, soybean oil on the Chicago Board of Trade fell 0.3 percent, while
the soybean oil contract on the Dalian Commodity Exchange declined 0.8
percent.
The May contract for palm
olein on China's Dalian Commodity Exchange declined 1.1 percent- Reuters