Malaysian crude palm oil futures ended 1.7 percent lower on Monday as prices of rival soyabean oil fell and estimates from a cargo surveyor showed weakening exports, traders said. The benchmark October contract on the Bursar Malaysia Derivatives Exchange settled down 43 ringgit to 2,540 ringgit ($738) a tonne.
"Soyabean oil has dropped sharply because of weather forecasts of thunderstorms and showers and that has put pressure on the palm oil market," said one trader. "Exports have just not lived up to expectations for the first 15 days," said another trader. "It is a set-back but the market seems to be confident that exports will pick up, sooner or later."
Industry officials said palm oil demand should get stronger from July as buyers locked in supplies for the Muslim fasting month of Ramazan in September. Other traded months fell between 4 and 53 ringgit in overall trade of 10,720 lots of 25 tonnes each. Palm oil is more than 8 percent off a historic high of 2,764 ringgit reached in June on robust demand from top importers China and India and dwindling supplies at home.
Exports of Malaysian palm oil products for July 1-15 fell 6.8 percent to 470,320 tonnes, from 504,501 tonnes shipped between June 1 and 15, cargo surveyor Interlake Testing Services said on Monday. Another surveyor, Society General de Surveillance, said palm oil product exports in the same period fell 8.8 percent to 468,878 tonnes. Chicago Board of Trade soyabean futures fell more than 30 cents on Monday due to shower forecasts in the US Midwest, traders said.
August soyabean oil in electronic trade during Asian hours lost 1.5 percent to 37.40 cents a pound. Malaysian palm oil takes its cue from the US soyaoil market because both commodities are used in products ranging from biscuits to lipstick and bodiless.
October palm oil on Singapore's Joint Asian Derivatives Exchange fell $3.75 to $744.50 a tonne. In the physical market, crude palm oil for July shipments in Malaysia's southern region were quoted at 2,660/2,670 ringgit a tonne. Trades were done between 2,665 and 2,680 ringgit.
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