Malaysian palm oil futures eased on Thursday evening to see its sharpest drop in a week as it tracked a weaker Dalian palm olein oil and on a slightly stronger ringgit, which led to a downtrend in benchmark prices. The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 1.2 percent lower at 2,646 ringgit ($659) per tonne at the close of trade, marking palm's second decline out of four sessions this week. Traded volumes were 52,993 lots of 25 tonnes each on Thursday evening, higher than a 2015 daily average of 44,600.
"Dalian RBD (refined, bleached and deodorised) palm oil was down," said a trader based in Kuala Lumpur, which dragged down benchmark palm oil prices. The most actively traded September contract for palm olein on the Dalian Commodity exchange declined 2.9 percent on Thursday. The market also declined on a stronger ringgit, the currency palm oil is traded in. Palm however is up 0.6 percent on a weekly basis, on track for a second straight week of gains.
"Generally this month should be strong for palm oil. As we move into the Muslim holiday, exports should improve," said the trader. The holy month of Ramazan begins in early June. The month before Ramazan starts usually sees a higher demand for palm oil for cooking. Malaysian palm oil shipments for the first ten days of May rose between 21 percent and 32 percent from the corresponding period a month ago, helped by larger exports to Europe and India. In competing vegetable oils, the September soybean oil contract on the Dalian Commodity Exchange fell 1.5 percent, while the Chicago Board of Trade soyoil contract for July rose 0.1 percent. The offer price for crude palm kernel oil stood around 4,894 ringgit per tonne in the evening, according to price assessments by Thomson Reuters.