Malaysian palm oil futures slid on Tuesday evening to their steepest fall in a week, tracking a decline in exports and weaker performance among other related edible oils. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 1.2 percent at 2,633 ringgit ($613.18) at the close of trade, its second consecutive session of declines and its sharpest daily decline since August 7.
Traded volumes stood at 54,387 lots of 25 tonnes each in the evening. "Palm was down due to weaker exports as well as softening external prices," said a Kuala Lumpur-based futures trader, referring to the export data from a cargo surveyor, and fall in soyaoil prices on the Chicago Board of Trade and China's Dalian Commodity Exchange.
Exports of Malaysian palm oil products for August 1-15 loading fell 14.6 percent to 512,039 tonnes from 599,414 tonnes shipped between July 1 and July 15, cargo surveyor Intertek Testing Services said on Tuesday. Another trader noted that demand for palm oil futures has softened ahead of India's imposition of a higher import duty tax.
India, the world's biggest buyer of vegetable oils, announced last Friday an increase in import taxes on crude and refined edible oils to protect local oilseed farmers from cheaper imports from top suppliers Malaysia and Indonesia. Palm oil prices are affected by the movements in related edible oils including soya, as they compete for a share in the global vegetable oils market.
The October soyabean oil contract on the Chicago Board of Trade slipped by up to 0.6 percent, while the January soyabean oil on the Dalian Commodity Exchange dipped by up to 0.3 percent. The January palm olein contract fell by up to 1 percent.
The palm oil November contract price faces a strong resistance at 2,687 ringgit per tonne and may retrace towards a support at 2,614 ringgit, according to Reuters commodities and energy markets technical analyst Wang Tao.