Malaysian palm oil futures fell 1.3 percent on Tuesday, trailing weaker overseas equity and commodity markets, as worries over eurozone debt's crisis triggered a sell-off. Oil, copper and grains markets tumbled on Monday as worry that the eurozone debt crisis could spill over into Italy bumped the dollar up against the euro, hurting prices of dollar-denominated commodities. Palm oil exports are priced in US dollars.
"The Malaysian market was tracking overseas soyoil and soybean markets as well as the equity markets," said a trader in Kuala Lumpur. The benchmark September crude palm oil contract on Bursa Malaysia Derivatives settled down 39 ringgit to 3,034 ringgit ($1,008) per tonne.
Overall traded volume stood 26,227 lots 25 tonnes, slightly above the usual 25,000 lots. Reuters technical analysis showed palm oil may have resumed a medium-term downtrend towards 2,920 ringgit per tonne. Prices were also weighed by June's Malaysian palm oil stocks that hit 18-month highs as overall production was higher than exports. But a Reuters survey showed top buyer India's vegetable oil imports may have risen 28 percent in June to their highest level since November as local supplies remain poor, with expectations buying will be buoyant again next month ahead of key festival feasts.
Other vegetable oils were weak in Asian hours ahead of the US Department of Agriculture supply and demand report due at 1230 GMT, which could show expanding corn stocks in US and higher global wheat supplies. US soyoil for July delivery was flat in Asian hours and the most active May 2012 soyoil contract on China's Dalian Commodity Exchange down 0.6 percent.
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