Malaysian palm oil futures ended slightly lower on Tuesday after top industry analysts projected weaker prices and as investors digested news that export tax cuts will only take effect next year. Palm oil prices have fallen by a fifth since the start of the year, but they could drop further as stockpiles could reach as much as 3 million tonnes by the start of 2013, swollen by strong output and slowing exports, analysts said.
Adding to concerns over rising stocks was the government's decision to implement palm oil export tax cut only in January. "The market is still trying to get a grip on how big stocks can get in Malaysia, as well as digesting news that the export taxes are not going to come through until early January," said ANZ agricultural commodity strategist Victor Thianpiriya.
At the close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange fell 0.2 percent to 2,466 ringgit ($808) per tonne. Total traded volumes stood at 40,889 lots of 25 tonnes each, much higher than the usual 25,000 lots. Technical analysis showed palm oil will be neutral until it gets out of a range of 2,361-2,528 ringgit per tonne, said Reuters analyst Wang Tao. Palm oil stocks in Malaysia hit a record 2.48 million tonnes in September, but strong export data in the first 15 days of October could help support prices.
Exports of Malaysian palm oil products for October 1-15 rose 13.1 percent to 769,534 tonnes from 680,112 tonnes last month, cargo surveyor Intertek Testing Services said on Monday. Another cargo surveyor Societe Generale de Surveillance showed exports in the same period surged 16.3 percent to 768,550 tonnes. In other vegetable oil markets, US soyoil for December delivery inched up 0.8 percent in late Asian trade. The most active January 2013 soybean oil contract on the Dalian Commodity Exchange ended 1.5 percent higher.
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