Malaysian palm oil futures fell on weak export demand on Thursday, with a stronger ringgit also adding downward pressure on prices. The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,298 ringgit ($529.37) a tonne at the end of the day. "The market fell mainly due to a lack of demand interest and a weaker dollar," explained a trader based in Kuala Lumpur, adding that palm inventories still remain high.
The latest cargo surveyor export data, showing 2-4 percent gains for the first 15 days of November compared with a month before, did little to improve market sentiment. Traders largely expect export demand to come down at the end of the month. The ringgit strengthened against the dollar in trade on Thursday, gaining 1.1 percent to reach 4.3410 at the end of the day. A weaker ringgit normally lends support to palm, as it makes the edible oil cheaper for holders of foreign currencies.
Palm oil stocks in Malaysia rose to a near 15-year high at the end of October following a surprise rise in output, putting downward pressure on benchmark prices. Output in Indonesia, the world's largest producer, however is seen dropping slightly in October from the previous month, according to a Reuters survey, due to impacts of the haze. Its crude palm oil exports are seen declining between 2-2.5 million tonnes in 2016 from an estimated 24-25 million tonnes in 2015, said Indonesia's national palm agency. Traded volume stood at 37,929 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day.
Palm oil still targets 2,233 ringgit per tonne as support at 2,291 ringgit does seem to hold, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In competing vegetable oil markets, the US December soyoil contract gained 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange lost 1 percent.
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