Malaysian crude palm oil futures fell 4.2 percent on Monday on increasing supply concerns and weaker crude oil prices, dealers said. The benchmark November crude palm oil contract on the Bursa Malaysia Derivatives Exchange fell 115 ringgit, or 4.2 percent to finish at 2,600 ringgit ($770) per tonne. Other traded contract fell between 42 and 136 ringgit per tonne. Overall volume stood at 9,733 lots of 25 tonnes each.
"The market is going down on the back of Mistry's comments which are looking at higher production," a trader said. Asia's high crude palm oil cycle is likely to stretch to October and November due to ideal weather conditions and liberal use of fertiliser, leading industry analyst Dorab Mistry told a conference on Monday.
Mistry, a director with Indian firm Godrej International, said Malaysian crude palm oil output forecasts of 17.4 million tonnes could be comfortably exceeded while Indonesia's output will rise beyond 19 million tonnes. Oil has fallen about 22 percent since its peak of above $147 in mid-July on concerns that high energy costs are depressing global fuel demand. US crude futures were at 115.13 per barrel at 1027 GMT.
But the benchmark crude palm oil future was not expected to fall below 2,200 ringgit per tonne in the next few weeks, Mistry said, because easing prices would attract demand and oil prices stabilising around $100 a barrel would provide support. "At the (2,200 ringgit) level, we should see strong demand growth," Mistry said.
Mistry's comment was in line with traders's expectations that the benchmark would find the strong support at 2,550 per tonne as rising palm oil exports offer support. Exports of Malaysian palm oil products for August 1-25 rose 0.77 percent to 1,141,494 tonnes from 1,132,797 tonnes shipped between July 1 and 25, cargo surveyor Intertek Testing Services said on Monday.
INDONESIA PALM EASES Indonesian crude palm oil prices fell on Monday, tracking the downtrend in the Malaysian market. Crude palm oil prices at the state marketing centre's auction in Jakarta fell 2.6 percent to 6,995 rupiah ($0.764) a kg from 7,183 rupiah a kg on Friday.
"Cooking oil refiners are in wait-and-see mode because Malaysian market continue its downtrend," said an official at the centre, which sells palm oil from state plantations. Producers in Medan, North Sumatra - home to Belawan port, the country's key port for palm oil exports - did not hold any auction.
In Jakarta, refiners offered refined, bleached, deodorised (RBD) palm olein - used as cooking oil - unchanged at 7,600 rupiah a kg.On the export front, sellers offered crude palm oil for shipment in September-December at $785-$790 a tonne. Buyers bid at $765-$770 a tonne. No trades were reported.