Malaysian palm oil futures fell in Friday evening trade, charting a third day of losses in four on expectations of rising output. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.2 percent at 2,442 ringgit a tonne at the close. Traded volumes stood at 24,646 lots of 25 tonnes.
"Palm prices are in decline as the market expects production to rise, especially after the Raya holidays," a Kuala Lumpur-based trader said, referring to the Eid-Al-Fitr festival that marks the end of the fasting month of Ramadan. The Muslim holy month, which fell in June this year, brings down productivity at palm oil plantations and hits harvesting because many workers go on leave. Indonesia and Malaysia, which produce nearly 90 percent of global palm oil, are Muslim-majority countries that observe Ramadan and Eid, leading to a shortage of workers for the harvest.
The Malaysian market will be closed for the Eid public holidays, reopening on June 28. Production in Malaysia, the world's second-largest producer behind Indonesia, rose to 1.65 million tonnes in May, up 6.9 percent from the previous month, according to the latest data from the Malaysian Palm Oil Board. In related oils, soybean oil on the Chicago Board of Trade was up 0.5 percent while September soybean oil on the Dalian Commodity Exchange fell 0.3 percent.
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