KUALA LUMPUR: Malaysian palm oil futures on Thursday logged their biggest monthly drop since October 2008 pressured by weak exports, even though prices edged up for the day as top producer Indonesia considers raising its biodiesel mandate.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 9 ringgit, or 0.18%, to 4,912 ringgit ($1,114.84) a tonne. The contract has fallen 22% this month amid worries over declining shipments and rising production.
Indonesia is considering expanding a mandatory palm oil mix in its biodiesel to 35% from 30%, a government official said, as authorities look for ways to stimulate palm fruit purchases from farmers after a slowdown in exports.
In second-largest producer Malaysia, exports in June fell between 10% and 13.4% from the previous month as shipments to India and the European Union slowed.
Traders had expected lacklustre exports amid Indonesia’s push to boost exports.
Malaysia’s June palm oil end-stocks will be in focus with markets expecting a recovery, while Indonesia’s end-May stockpiles are likely to be sharply higher and may be seen above 7.5 million tonnes due to the temporary export ban, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract eased 0.3%. Soyoil prices on the Chicago Board of Trade were down 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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