Malaysian palm oil futures rose on Thursday as buyers returned after three straight sessions of losses, and investor sentiment brightened for exports to recover in the second half of May. Shipments of palm oil fell between 3 percent and 8 percent over May 1 to 15 from the corresponding April period, fanning concerns that demand for the tropical oil is slowing, but traders said the decline was smaller than expected and exports could pick up in the coming weeks.
Traders also expect output in Malaysia, the world's second-largest producer, to slow this month and to help further ease stocks that have dipped below the psychological 2-million-tonne mark to 1.93 million tonnes in April. "There are buyers coming in to support the market, which can be seen from the increased trading volumes," said a trader with a foreign commodities brokerage in Kuala Lumpur.
By Thursday's close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange had risen 0.7 percent to 2,314 ringgit ($768) per tonne. Prices traded in a range between 2,292 and 2,324 ringgit. Total traded volumes stood at 44,002 lots of 25 tonnes each, higher than the usual 35,000 lots. Malaysia announced on Wednesday it would set its crude palm oil export tax for June at 4.5 percent, unchanged since March. Top producer and biggest rival Indonesia is to set June taxes at the end of the month. In vegetable oil markets, US soyoil for July delivery rose 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 0.1 percent.