Malaysian palm oil futures fell on Monday evening on the back of a stronger ringgit and official data showing that output rose in March. The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed 0.5 percent down at 2,667 ringgit ($686) a tonne for a fifth straight session of declines. It earlier touched an intraday low of 2,661 ringgit, its lowest since March 24. Traded volumes were 35,643 lots of 25 tonnes each, against last year's daily average of 44,600 lots.
Traders said the market fell because of stronger than expected output data from the Malaysian Palm Oil Board (MPOB), which reported a 16.9 percent rise in production and a 13.1 percent decline in stockpiles. Malaysian shipments in March rose by 22.9 percent from a month earlier as sellers rushed to export crude palm oil ahead of a 5 percent export duty starting in April.
"MPOB stocks data could have been lower, and output was higher than expected by almost 10 percent," one palm trader said, referring to personal estimates, while another said that the stronger ringgit had capped palm's upside. A Reuters poll of nine planters, traders and analysts had earlier forecast output to rise by 8 percent month on month to 1.13 million tonnes.
A stronger ringgit, the currency used for palm oil trading, drags on the vegetable oil's price. The ringgit strengthened 0.3 percent to 3.8870 against the dollar on Monday evening, making palm oil more expensive for holders of foreign currencies. Palm oil still targets 2,629 ringgit a tonne as it has cleared a support at 2,716 ringgit, said Wang Tao, Reuters market analyst for commodities and energy technicals. In competing vegetable oil markets, the May Chicago Board of Trade soyoil contract gained 0.2 percent and the September soybean oil contract on the Dalian Commodity Exchange rose 0.2 percent. The offer price for crude palm kernel oil dropped slightly to 4,993.45 ringgit a tonne in the evening, according to price assessments by Thomson Reuters.
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