Malaysian palm oil falls to near two-week low

Malaysian palm oil futures fell to their lowest in nearly two weeks on Monday, stretching losses into a fourth day as a modest pick-up in export demand was offset by strength in the ringgit and lingering concerns over rising yields. Exports of Malaysian palm oil have been firm this month, but a stronger local currency may see overseas buyers trimming purchases of the ringgit-priced feedstock. The ringgit was up 0.5 percent at 3.5655 per US dollar by 1019 GMT, after touching as high as 3.5565.
"The two bearish factors affecting prices at the moment are the currency and high production in April," said one trader with a foreign commodities brokerage in Kuala Lumpur.
"The exports are slightly better than expected, but they're overshadowed by MPOA's supposed 17 percent increase in production," the trader added, referring to estimates by planters group Malaysian Palm Oil Association last week.
"If production turns out to be not as good, there might be some bounce (in prices)."
The benchmark July contract on the Bursa Malaysia Derivatives exchange had inched down 2.1 percent to 2,109 ringgit ($592) a tonne by Monday's close, just above the intraday low of 2,107 ringgit, the weakest since April 14.
Total traded volume stood at 55,576 lots of 25 tonnes each, well above the usual 35,000 lots.
Cargo surveyor Intertek Testing Services reported that shipments for April 1-25 rose 5.6 percent from a month earlier to 904,112 tonnes, thanks to stronger demand from China and Europe.
Another cargo surveyor Societe Generale de Surveillance showed exports for the same period rose 7.1 percent.
Indonesia, the world's largest palm grower, will keep its export tax for crude palm oil (CPO) unchanged at zero percent in May.
Indonesia is also considering reducing the CPO export tax rates, which currently range from 7.5 percent to 22.5 percent, according to local media reports. The threshold of $750 a tonne for the duty to kick in will remain the same, a senior government official was quoted as saying.
In other markets, Brent crude reversed early gains to fall below $65 on Monday as the dollar strengthened, offsetting signs that US shale output may have started to decline and concerns that fighting in Yemen could disrupt Middle East supplies.
US July soyoil contract rose 0.2 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange fell 0.1 percent.