Malaysian crude palm oil futures slipped 1.2 percent on Wednesday as weakening crude oil prices and lack of demand weighed on the market. Palm oil, used in products from biofuels to ice-cream, is 17.9 percent below a record high of 4,486 ringgit a tonne reached in March, as surging prices have slowed demand.
By the midday break, the benchmark August contract on the Bursa Malaysia Derivatives Exchange was down 45 ringgit at 3,685 ringgit ($1,137) per tonne. "Today's weakness is very much linked to crude oil," said one dealer with a domestic brokerage. "And there is no big demand push which can support the prices. China and India are very quiet."
Other traded months fell between 41 and 61 ringgit. Traded volumes stood at 3,030 lots of 25 tonnes each, easing from the usual midday trade of 5,000 lots. Exports of Malaysian palm oil products for May 1-25 fell 2.36 percent to 993,093 tonnes from a month ago period, cargo surveyor Intertek Testing Services said.
Oil was flat on Wednesday after the previous day's slide as the dollar rose and dealers braced for weakening demand from Asia as some smaller consumer nations began to ease off subsidies by raising local fuel prices. In Malaysia's physical market, crude palm oil for June shipment in the southern region was quoted at 3,675/3,700 ringgit. Trades were no traders reported by the midday close.