Malaysian palm oil futures slid for a second straight session on Thursday to their lowest in almost a year, with pressure from slowing imports by top consumers India and China amid expectations of higher production. The benchmark palm oil contract for October on the Bursa Malaysia Derivatives Exchange had eased by 0.5 percent to 2,026 ringgit ($521) a tonne by the midday break. Earlier in the session, it slid to 2,020 ringgit a tonne, the lowest since September 2014.
"Malaysian palm oil production in the third quarter will be excellent," said one edible oil trader in Kuala Lumpur. "Demand is tapering at rates not seen before as India and China are at the sidelines watching." Traded volume stood at 16,210 lots of 25 tonnes each, above the roughly 13,500 lots usually traded by the close of the morning session. Palm oil stocks in Malaysia, the world's No 2 oil palm producer after Indonesia, likely rose in July as output picked up, while lower demand for exports after the end of the Muslim holy month of Ramadan also added to inventory levels, a Reuters poll showed.
Exports of Malaysian palm oil products in July fell 6.4 percent to 1.54 million tonnes from the 1.65 million tonnes shipped in June, cargo surveyor Intertek Testing Services (ITS) said last week. On the technical front, palm oil may fall to 1,997 ringgit per tonne, as it has pierced below a support at 2,031 ringgit, wrote Reuters market analyst Wang Tao. The support is provided by the 176.4 percent Fibonacci projection level of a wave C, the third wave of a three-wave cycle that developed from the June 8 high of 2,362 ringgit. In other vegetable oils, the US August soyoil contract was largely unchanged in Asian trade, while the most active soybean oil contract on the Dalian Commodity Exchange slid 0.6 percent.
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