Malaysian palm oil slid almost 2 percent on Tuesday in its steepest decline in more than three weeks as investors locked in gains after the commodity touched a two-month high the session before. Weakness in rival soyoil also weighed on palm along with crude oil which traded near seven-year lows. Benchmark palm oil on the Bursa Malaysia Derivatives Exchange fell 1.6 percent to close at 2,397 ringgit ($563) a tonne. It touched 2,438 ringgit on Monday, its loftiest since October 6.
Prices were influenced largely by external markets, said a Kuala Lumpur-based trader. "We have seen big losses in crude oil and soybean oil futures," he said. The market is awaiting a monthly report on output, stocks and exports from the Malaysian Palm Oil Board due on Thursday.
Malaysian palm stocks in November likely reached a 15-year high on slow exports, a Reuters poll showed, suggesting more downside risks for prices. "The market is talking about high stocks but we are looking at a big drop in production going forward as we move into the peak of monsoon season," a second trader said. Data showing strong demand from China helped limit the decline in prices, with the country's imports of edible oils rising 21 percent from October to 580,000 tonnes last month. Palm oil could target the next support level of 2,370 ringgit, said Reuters analyst Wang Tao.
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