Malaysian palm oil futures fell to a 2-week low on Thursday, extending losses for a third straight session as weak sentiment dominated the market with investors worrying about record high stocks. Traders are looking out for Malaysia's palm products export figures for November due on Friday, with expectations of a slight decline compared with a month ago.
The latest data for the first 25 days of the month showed a drop of less than 2 percent. A lower export demand may push Malaysian inventory levels slightly higher in November despite slowing production. "The market is still under pressure. Exports should be down by more than 1.5 percent for the month," said a trader with a foreign commodities brokerage in Malaysia.
At the close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to 2,386 ringgit ($782) per tonne. Prices earlier touched a low of 2,367 ringgit, a level last seen on November 14. Technicals suggested palm oil is expected to test a support at 2,353 ringgit, a break below which will lead to a further drop to 2,288 ringgit.
Total traded volumes stood at 24,134 lots of 25 tonnes each, thinner than the usual 25,000 lots, as some traders remained on the sidelines ahead of top analysts presenting their price forecasts for 2013 at the Indonesian Palm Oil Association's two-day conference in Bali on Thursday and Friday.
Palm oil output in the world's biggest producer Indonesia is expected to climb 7 percent next year to 27 million tonnes, a top industry association official said on the sidelines of the conference, as three years of acreage expansion efforts bear fruit. Two trading sources also told Reuters at the conference that India's oilseed industry has submitted a proposal to the government to raise import taxes on palm oil and other edible oils, arguing demand for local output is being hurt after a sharp fall in prices. In other vegetable oil markets, US soyaoil for December delivery gained 0.4 percent in late Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.2 percent lower.
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