Malaysian palm oil futures fell to a one-week low on Thursday as investors continued to book profits from a recent rally in prices, although trading was thin amid caution ahead of upcoming export figures for the first half of the month. But a weaker ringgit currency cushioned prices of the edible oil by making it cheaper for overseas buyers and refiners who are restocking ahead of Ramazan. The ringgit has lost 1.3 percent versus the dollar this week.
A drop in palm oil stocks in Malaysia, the world's No 2 producer of the edible oil, to their lowest in nearly a year, at 1.82 million tonnes by the end of May, also checked losses. "Prices are still trading within a range, but weakness in the ringgit should cap the downside. There is also talk about demand picking up ahead of Ramazan," said a dealer with a foreign commodities brokerage in Malaysia.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange, which has gained 9 percent over the past five weeks, lost 1.1 percent to close at 2,423 ringgit ($773) per tonne on Thursday. It fell to 2,411 ringgit earlier in the session, a level last seen on June 6. Total traded volumes stood at 22,235 lots of 25 tonnes each, well below the average 35,000 lots, as traders waited for the June 1-15 exports data by cargo surveyor Intertek Testing Services due on Saturday.
India's refined palm oil imports hit a record high in May by jumping 47.5 percent from April, a leading trade body said, pushing total purchases of the tropical oil up for the first time since January on lower prices and tight domestic supplies. The latest US Department of Agriculture (USDA) report pegged its global soybean stockpile estimate for the 2013/2014 season at 265 million bushels, within a consensus estimate of 268 million. In vegetable oil markets, US soyaoil for July gained 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent after a three-day holiday.
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