Malaysian palm oil price sees sharpest drop in 7 weeks on weak exports

Malaysian palm oil price sees sharpest drop in 7 weeks on weak exports

 

KUALA LUMPUR,. Malaysian palm oil futures saw their sharpest fall in seven weeks on Friday evening, weighed down by weak export demand and losses in related edible oils on the U.S. Chicago Board of Trade and China’s Dalian Commodity Exchange.

The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 1.5 percent to 2,455 ringgit ($617) a tonne at the close of trade, its biggest drop since April 9.

It earlier fell as much as 1.8 percent to 2,447 ringgit, but was still up 0.2 percent for the week in a third straight week of gains.

Trading volume stood at 58,656 lots of 25 tonnes each at the end of the trading day.

Palm oil prices hit a seven-week top in the previous session tracking U.S. soyoil strength and supported by a weaker ringgit.

Malaysian shipments of palm oil products during May 1-25 fell 16.6 percent from the corresponding period last year, according to independent inspection company AmSpec Agri Malaysia on Friday.

Another data release by cargo surveyor Societe Generale de Surveillance on Friday showed exports in the same time period fell 13.5 percent.

Full-month exports are seen weakening as Malaysia resumed its crude palm oil export tax at a 5 percent rate for May, after a four-month duty exemption to boost demand and reduce stockpiles.

Palm oil is also impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.

The Chicago July soybean oil contract fell 0.3 percent, while the September soybean oil on China’s Dalian Commodity Exchange was down 0.2 percent.

Meanwhile, the Dalian September palm oil contract dropped 0.9 percent.

– Reuters