Malaysian crude palm oil futures closed lower on Thursday as players took profit after a strong rally this week and prices of rival soyoil declined. The benchmark February contract on the Bursa Malaysia Derivatives exchange finished down 30 ringgit at 1,836 ringgit ($505) a tonne, after hitting a 30-month high of 1,949 ringgit on Tuesday.
"The price rise was phenomenal this week, it's time to book profits, and soyoil is also marginally down," said one dealer. Other traded months fell between 22 and 35 ringgit a tonne. Overall volume stood at 11,753 lots of 25 tonnes each.
Chicago Board of Trade December soyoil closed 0.01 cent lower at 28.87 cents per lb., with the back months up 0.05 to down 0.10 cent. Soyoil and palm oil compete for exports and their prices often move in step.
Malaysian crude palm oil futures rose byna triggered panic buying. Three big Malaysian plantation firms are planning to merge to create the world's largest listed palm-oil business worth $7 billion in a move aimed at cutting costs and attracting more investors.
The planned merger between Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Bhd will be officially announced on Monday, a source familiar with the deal said. Trading was dull in the physical crude palm oil market with buyers waiting for prices to decline further. November shipments in the southern region were quoted at 1,775/1,785 ringgit a tonne. A few deals were sealed between 1,760 and 1,775 ringgit.
Exports of Malaysian palm oil products for November 1-20 fell 14.8 percent to 834,065 tonnes from the same period last month, cargo surveyor Intertek Testing Services said. Another cargo surveyor, Societe Generale de Surveillance, said exports fell almost 9 percent to 856,664 tonnes over the same period.
Malaysia's palm oil output is expected to decline in coming months because of widespread rains during the monsoon season that started this month. The state-run Malaysian Palm Oil Board said stocks at the end of October fell 11.44 percent and output was down 13.03 percent. Exports during the month jumped 9.13 percent.