Malaysian palm oil futures fell on Tuesday for a fifth straight session to their lowest in three months, reflecting weakness in competing markets and declines in commodities globally, although a weak ringgit provided some support. By the close, benchmark palm oil for October on the Bursa Malaysia Derivatives Exchange had slipped 0.47 percent to 2,130 ringgit ($558.62) a tonne. Earlier in the session the contract hit 2,115 ringgit, its lowest since April 30. Total traded volume stood at 37,341 lots of 25 tonnes each, above the roughly 35,000 lots usually traded daily.
"We're taking the lead from the Dalian market," said a trader with a foreign commodities brokerage in Kuala Lumpur, referring to recent declines in soybean oil futures in China's Dalian Commodities Exchange. Despite the external pressure on the Asian palm benchmark, a weak ringgit was offering some support, a second trader said. For the past three weeks, authorities in Malaysia, the world's number two palm oil producer, have allowed the ringgit to trade below levels that in 1998 prompted them to impose a dollar peg and capital controls.
Meanwhile, the top producer of palm oil Indonesia expects to face moderate El Nino weather conditions from July to November, affecting provinces from Sumatra to eastern Indonesia, the country's National Disaster Mitigation Agency (BNPB) said on Tuesday. Separately, Indonesia, has issued regulations that change the way export taxes are calculated for crude palm oil and other palm products, with amounts due now expressed in dollars rather than a percentage of the price. The US soyoil contract for August gained 0.43 percent in afternoon Asian trade, while the most active January soybean oil contract on the Dalian Commodity Exchange lost 0.94 percent, and Dalian RBD palm oil for September delivery was down 0.72 percent.
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