Malaysian crude palm oil futures ended largely unchanged on Tuesday after falling near a six-week low as investors fretted about the prospects of weakening demand for the edible oil and uncertainty surrounding the euro zone debt crisis. Benchmark April palm oil futures on the Bursa Malaysia Derivatives Exchange ended 0.1 percent lower to close at 3,078 ringgit ($1,013) per tonne. Prices earlier touched 3,044 ringgit, a level last seen since December 21.
Traded volumes were thin at 17,183 tonnes of 25 tonnes each, compared to the usual 25,000 tonnes. Greek Prime Minister Lucas Papademos raised investors hopes on Tuesday, saying negotiators had made "significant progress" in talks to strike a debt restructuring deal, with the aim of having a definitive agreement by the end of this week.
But just as Greece's problems moved toward a resolution, concerns are growing that Portugal might need a second rescue as Lisbon's borrowing costs soar. Cargo surveyor data also pointed to a 12 and 13 percent decline in No. 2 producer Malaysia's palm oil exports for January, weighing on sentiment and limiting trade interest in the futures market that has lost slightly more than 3 percent this month.
"The market's down quite a bit on the back of several factors. Local sentiment was not so good as shown by the export numbers," said a trader with a foreign commodities brokerage in Malaysia. Malaysian palm oil exports for January fell close to 12 percent to 1.3 million tonnes, in line with market's expectations, according to cargo surveyor Intertek Testing Services. Another cargo surveyor, Societe Generale de Surveillance, reported a similar decline, saying exports for the period fell 13 percent to slightly below 1.3 million tonnes.
Top importers including China, India and the European Union have also cut back orders, adding to the decline in exports. In other vegetable oil markets, the US soyoil contract for March delivery gained 1.1 percent while the most active September 2012 soyoil contract on China's Dalian Commodity exchange lost 0.8 percent.
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